Value stocks outperforming growth by nearly 700 basis points

Over the past year, the Russell 3000 TR Value index outperformed its growth index counterpart by 693 basis points. Returns on value stocks - typically measured by lower price-to-earnings and price-to-book values - began diverging from growth stocks in the fall of last year and have continued to do so through the first six weeks of 2013. This outperformance in the last year is a sharp contrast to how value stocks performed vs. growth stocks in the aftermath of the financial crisis. For the three-year period ended March. 2, 2012 (three years after the bull market in equities began), growth stocks outperformed value by about 90 basis points on an annualized basis.