Are rising global yields the 'new norm' for investors?

Leading to growth stocks' underperformance

One of the easiest routes to outperformance in the last few years has been via 'quality growth' companies - those combining high levels of earnings growth with strong balance sheets.

The dominance of growth as an investment style can be attributed largely to the launch of quantitative easing in America, the UK and Europe. On a simple discounted cash flow measure, the relentless fall in yields as a result of QE meant that the present value of companies' future earnings was boosted. Quality growth companies are generally longer duration than their value counterparts, and have seen their multiples expand in some cases quite dramatically.  Last year, however, that trend came to an end: markets reverted to their long-term form of value as a style outperforming growt...