The Value factor has had a rough few years, ok...maybe more like a decade. As shown below (click to enlarge chart) Value massively underperformed Growth, particularly in the second half of the last decade with interest rates continuing to remaining near zero; 2020 was just brutal.
New decade, new hope? With the threat of inflation and rising rates on the horizon as President Biden's plans for up to $6 trillion of fiscal spending gets underway, Value made a strong comeback in Q1 2021. In fact, it was the second best quarter of Value outperformance in nearly a 100 years (click chart below to enlarge). But will it last? After hitting a high of 1.74% on March 31, the yield on the benchmark 10-year Treasury Note has steadily fallen to 1.6% as of May 7. So, don't count the FAANGMs out just yet, they continue to be, we think, investors' best bet (except for maybe Netflix :().
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