Global multi‑asset portfolios at T. Rowe Price start from a diversified position between the value and growth investment styles. We deviate from the neutral position based on our tactical asset allocation views for the next six to 18 months. These views are defined using a wide range of quantitative and qualitative inputs.
For the first time in about 10 years, we began to overweight value versus growth in September 2020. Since then, the value style outperformed the growth style significantly. One way to measure this rotation from growth to value is to look at the short‑term divergence of factor returns. We define a factor portfolio for value and growth as a long‑short portfolio. The long position is the top quintile of stocks representing the factor, and the short position is the bottom quintile of stocks representing the factor.
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