A Snapshot Of Growth vs. Value Investing (Small-Caps)

May 27, 2022
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View from the Observation Deck

1. We update this post on small-capitalization (cap) stocks every now and then so that investors can see which of the two styles (growth or value) are delivering better results.
2. The S&P SmallCap 600 Pure Growth Index closed at 11,974.51 on 5/24/22. It stood 33.67% below its all-time closing high on 11/8/21, according to Bloomberg. The S&P SmallCap 600 Pure Value Index closed at 8,904.00 on 5/24/22. It stood 14.73% below its all-time closing high on 11/8/21.
3. The S&P SmallCap 600 Pure Value Index outperformed its growth counterpart in five of the six periods featured in the chart. The past 15 years is the only period in which the S&P SmallCap 600 Pure Growth Index has the edge.
4. The returns through 5/24/22 were as follows (Pure Growth vs. Pure Value): 15-year average annualized (7.74% vs. 6.33%); 10-year average annualized (9.49% vs. 11.01%); 5-year average annualized (4.27% vs. 8.25%); 3-year average annualized (3.83% vs. 15.24%); 1-year (-23.91% vs. -3.40%) and year-to-date (- 29.16% vs. -6.50%).
5. As of 4/30/22, the largest sector weighting in the S&P SmallCap 600 Pure Growth Index was Financials at 22.3%, according to S&P Dow Jones Indices. The largest sector in the S&P SmallCap 600 Pure Value Index was Consumer Discretionary at 20.1%.
6. From 12/31/21 through 5/24/22 (YTD), the S&P SmallCap 600 Consumer Discretionary Index posted a total return of -30.60%, compared to -14.52% for the S&P SmallCap 600 Financials Index, according to Bloomberg. The S&P SmallCap 600 Index was down 16.02% over the same period.
7. At a combined weighting of 22.2%, the S&P SmallCap 600 Pure Value Index's exposure to Energy and Materials was significantly higher than the 5.0% combined weighting in the S&P SmallCap 600 Pure Growth Index as of 4/29/22, according to S&P Dow Jones Indices. They are the two best-performing smallcap sectors so far in 2022. From 12/31/21-5/24/22, the S&P SmallCap 600 Energy Index posted a total return of 47.84%, while the S&P SmallCap 600 Materials Index was down 2.96%, according to Bloomberg.