Growth vs value: Where is the line?

Growth vs value: Where is the line?

The drivers of the sell-off seen in some developed market equity sectors may still be a puzzle, but the type of stock affected is less opaque: it is clear the winners of recent years have been hit hard.

More specifically, commentators have pointed to a reversal in the ‘growth over value’ trade which has been said to dominate equity markets in recent years. But what do we mean by ‘growth’ and ‘value’ stocks? The difference between these two styles is arguably less clear cut than some would have it. Dan Harlow, co-manager of the AXA Framlington American Growth fund, acknowledged the difference between growth and value is “sometimes hard to see” – at least when it comes to indices. Take the Russell 1000 Growth and Russell 1000 Value indices in the US. The former encompasses stocks wi...