Value is like a Rorschach test—an inkblot that says more about you than what you’re looking it. The same may be said of value stocks, especially with artificial intelligence distorting the picture.
Whatever your lens, value is on a roll. The Russell 1000 Value index is up 14% this year, compared with 5% for the Russell 1000 Growth index. A surge in energy stocks has fueled the value index. It has also become more of a tech proxy, with growth sectors playing a bigger role.
The comeback is nascent—and would hardly be the first one to fizzle. But it could mark a turn for an investing style that has struggled for decades. Large-cap growth has returned about 13% a year on average since 2006 compared with 8.7% for value, according to FTSE Russell. Growth has led value in 14 of the past 18 years.