From 2017 to 2021, the Russell 3000 Growth index generated higher annual returns than the Russell 3000 Value index. However, that trend has reversed this year, with the growth index losing 27.5% compared with -13.3% for the value index.
U.S. growth stocks underperform this year
During the previous five years, the growth index has produced a 10.8% annualized earnings growth rate, edging out the value index's 10.5%.
This year, the growth index's price-to-earnings ratio has fallen to 28 from 39 at the end of last year. In the preceding years, when growth stocks outperformed, the index's P/E expanded from 23 at the end of 2016.
The value index's earnings multiple has contracted to 16 from 19 this year. The P/E was 21 in 2016.
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