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Index IDEA: US equities adjust their style in 2017

After a 2016 dominated by value-oriented stocks, growth-oriented US stocks have made a decisive comeback in 2017 as of April 20 according to the Russell US style indexes.

After rising 7.1% in 2016 as compared to a 17.3% rise for the Russell 1000® Value Index, the US large cap Russell 1000® Growth Index has risen 9.3% in 2017 as compared to a 2.6% rise for the Russell 1000 Value Index.

And after rising 11.3% in 2016 as compared to a 31.7% rise for the Russell 2000® Value Index, the US small cap Russell 2000 Growth Index has risen 5.6% in 2017 as compared to a -0.5% decline  for the Russell 2000 Value Index.   

Is the recent style shift for US equities a short-term blip, or does it reflect a longer-term secular trend? FTSE Russell index experts believe short-term style swings may reflect a more volatile market environment.

Mat Lystra, Senior Index Research Analyst, FTSE Russell, said:

“The current market environment as reflected by the Russell style indexes is a great example of the need to be mindful of both growth and value influences on investors and the markets. It is typical to see short-term swings between value- and growth-oriented stocks during periods of more volatility and less conviction on the part of investors, and a natural reflection of a number of factors including the beginning of a new presidential administration and the inherent change that brings as well as heightened geopolitical concerns, among other trends weighing on investors.” 


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Source: FTSE Russell as of April 20, 2017. Past performance is no guarantee of future results. Please see the disclaimer for important legal disclosures.

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Views expressed by Mat Lystra of FTSE Russell are as of April20th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell US Indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

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