Value stocks have advanced roughly 20% year-to-date while growth stocks have slipped about 1.4%, leaving growth trailing value by around 21 percentage points. This gap ranks as the second-largest setback for growth relative to value since the Global Financial Crisis, highlighting an unusually sharp style dislocation in a short window.
Historically, sizeable gaps between value and growth have not persisted indefinitely. After the early-2000s tech unwind, a powerful value run was eventually followed by growth catch-up in subsequent years. A similar pattern appeared around the 2008-2009 crisis, when value’s sharp underperformance versus growth later reversed as conditions normalized.
More recently, the post-Covid vaccine rotation from late 2020 into early 2022 saw value indices outperform growth by more than 15% before growth benchmarks regained ground from mid-2022 through 2023. Across these episodes, extreme style dispersion has often been followed by at least partial mean reversion rather than a one-way, permanent regime break between value and growth factors.
Terminology
- 01Global Financial Crisis: Severe 2007-2009 worldwide financial downturn triggered by housing and credit collapse.
- 02Mean reversion: Tendency for extreme asset performance to move back toward historical averages.