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Last year Jim conducted a series of interviews for Real Vision titled Real Visionaries. Below is an excerpt of an interview with Rob Arnott of Research Affiliates.
Rob, sometimes known as the “Godfather of Smart Beta,” explains how value has underperformed growth over the past 15 years.
The natural response is to look for mean reversion. But as the next set of charts shows, value stocks have underperformed growth stocks since May 2007. Value stocks have only outperformed since the end of November.
Starting with the S&P 500, value’s underperformance to growth bottomed in November and has a long way to go to meaningfully retrace growth’s outperformance over the last 15 years.
Conclusion