“Portfolio managers that invest in undervalued stocks have lagged funds that hold growth stocks over the past decade — leading market commentators to speculate that value investing is dead.
Not so fast, argues asset manager Dimensional Fund Advisors.
Yes, investors holding U.S. value stocks — those trading at a low price-to-book value — have produced an annualized compound return of 12.9 percent. That compares with a 16.3 percent annualized return for growth stocks, or those with a relatively high price. But Dimensional has published new research showing that it’s not the performance of value stocks that has been out of whack — rather, the performance of growth stocks has been abnormally high relative to historical levels.”View Full Article