Why Value Strategies Now?
Growth has been outperforming since before the Global Financial Crisis, though its dominance has been wobbly of late. The chart below shows the rolling 10-year performance of the stock market’s highest price-to-earnings (P/E) quintile of US stocks against the lowest P/E quintile. In the decade to February 2021, the most expensive stocks beat the cheapest by 2.5% a year, a differential akin to what was observed at the apex of the Dot-Com bubble
10-Year Annualized Outperformance, High P/E Stocks vs. Low P/E, 7/31/1951 – 1/31/2021
Source: Ken French Data Library, CRSP database, 07/31/1951 – 1/31/2021, with data through 02/26/2021 using WisdomTree's attribution software on the S&P 500 for the final month. Past performance is not indicative of future results.
Annualized Performances by Decade
Growth and Value come in and out of fashion. In recent decades, high P/E Growth stocks have tended to get the better of Low P/E Value peers. However, cyclical stocks – those most sensitive to economic activity – may begin to outperform as the world emerges from the Covid-19 recession. If so, Value stocks may be primed for newfound market leadership, as was the case for most of the last 70 years
Our Value Proposition
Our dividend and core Modern Alpha® ETFs naturally tilt toward Value.
While most ETFs weight stocks by market capitalization, WisdomTree believes fundamentals like dividends and earnings offer a more objective measure of company health. Our core and dividend-oriented Modern Alpha® ETFs weight by fundamentals, providing a natural tilt toward Value that could be beneficial in a post-Covid cyclical recovery.
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Please click on a Fund and see the Performance tab for fund standardized performance, and see the Details tab for fund-specifc links for yield, most recent month-end performance and a prospectus.
Commentaries from Our Thought Leaders
The bond sell-off earlier this year has led to high levels of interest rate sensitivity in the stock market. Jeff Weniger makes the case for equity investors to allocate toward value stocks in a rising interest rate environment.
Value investing is in the spotlight, but not all value strategies are created equal. Kara Marciscano dives into how various value factors have performed over recent and longer-term periods.
We believe value and dividend payers still have room to run following historical outperformance to start the year. Against this backdrop, Matt Wagner explains why investors should consider allocating toward higher-quality dividend payers.
