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Partner Content by T Rowe Price

Value – disrupted but not destroyed

Following another year in which U.S. growth stocks have extended their unusual cycle of outperformance over U.S. value stocks in terms of both duration and magnitude, investors may be wondering if something has radically changed.

Historically, over long periods of time, value stocks have outperformed growth stocks by a substantial margin. However, that has not been the case for more than 13 years as of December 2019, the longest period of growth dominance on record.

After such cycles of extreme underperformance, there usually has been a sharp and sudden reversion to outperformance by value. But now, with technological change and disruption having driven growth stock performance for so long – forces showing few signs of abating – does that mean the historical cycle of mean reversion is dead or dampened?

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