Here is our update from this time last year. Growth was clearly winning the “style’ game, with a very slight edge to small-cap growth in 2015.
This year, it has been all about Value investing, in terms of style returns. Bespoke added a metric on one of their tables showing the style returns, post-election and YTD. About half the annual returns for the styles came post-November 8th, 2016.
The point is, readers and investors have seen a complete reversal of the Growth and FANG out-performance this year. It makes sense too, given that Energy bottomed in January ’16, commodities also started improving after Q1 ’16, which means Basic Materials had a better 2nd half of ’16.
What’s the call for 2017?
Personally I'd rather not make a forecast. As a “blend” investor for clients, (both value and growth) clients growth names performed pretty well, like Microsoft (NASDAQ:MSFT) and Schwab (NYSE:SCHW) while client “value” names like General Motors (NYSE:GM) and Ford (NYSE:F), had tougher years. Here is what Jeff Miller said about forecasting and if I don’t have a strong forecast based on data or research, I’d rather not venture out with an opinion.
For clients, both styles will be employed.