Don't forget about value

Investors commonly expect growth companies to provide the greatest long-term capital appreciation in their portfolios and expect value companies to provide capital protection, with appreciation. However, as noted in the chart below, our long-term analysis of the major US stock market indices shows that the Russell 2000® Value Index historically has provided the greatest long-term capital appreciation, with a cumulative return of 583% for the period April 30, 1997 to Feb. 28, 2019, outperforming small-cap growth’s return of 405% and the S&P 500® Index’s return of 424%.

Long-term capital appreciation

Long-term capital appreciation

Morningstar. Time period shown is April 30, 1997 to Feb. 28, 2019.

Past performance is no guarantee of future results.

What this means for investors:

The search for investment growth remains a central, critical goal for today’s investors — but finding a reliable source to fuel portfolio growth can be a challenge. We believe there is an opportunity for the small-cap value asset class to potentially provide that solution. Visit Define Your Destination and learn more about what your investments can help you achieve.



Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

The views expressed represent the Manager's assessment of the market environment as of February 2019, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the Manager's views.

Value investing focuses on buying stocks that are trading at bargain prices based on fundamental analysis, then holding them until they become fully valued.

Typically, value investors select securities with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields.

The Russell 2000 Value Index measures the performance of the small-cap value segment of the US equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.

Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.