Fund buyers back value style to beat growth over next year

Fund buyers have been rotating their equity exposure from growth to value plays, to take advantage of improving global economic conditions.

Growth stocks have strongly outperformed value names since 2009, but the latter are now starting to pull ahead (see graph below). Between 31 December 2008 and 30 December 2011, the MSCI USA Growth index was up 49%, versus 23.5% for its value counterpart. However, over the past year, the MSCI US Value index began to outperform, returning 31.5% over the 12 months to 31 July 2013, compared to 25.8% for the Growth index. “Last year, the place to be in the US was growth-style funds, but a lot of investors are now looking at value-driven managers and unloved areas that are going to re-ra...