February 2014 Investment Insight, "Growth vs. Value – Only a Part of the Story in Large Capitalization Equity Management"

Abstract

This issue of Investment Insight presents results of an analysis of Growth and Value investment managers for a 10-year period. That analysis underscores the importance of considering Growth and Value managers' sub-styles. Growth sub-styles include Aggressive Growth, Traditional Growth and Growth at a Reasonable Price. Value sub-styles include Relative Value, Traditional Value and Deep Value.

The analysis shows that while Growth and Value are dominant influences, sub-styles also play a significant role in determining an investor's outcome.

Additionally, the analysis also contradicts the following myths:

  • Active managers tend to underperform in roaring bull markets.
  • Growth and Value are flip sides of the coin.
  • Greater risk (defined by larger standard deviation) begets higher returns.

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