Audience for the document: Share Class: Language of the document:


Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest

Please enter valid search characters


Investing in Both Growth and Value May Be Crucial Now

Sébastien Page, CFA, Head of Global Multi-Asset

Executive Summary

Recently, growth stocks have significantly outpaced value, prompting investors to question if it is time to reallocate to value. In an environment where strong fundamentals support growth and cheap valuations favor value, we believe investors should be well diversified. Our asset allocation portfolios are close to neutral, with a slight overweight to U.S. growth stocks.


Over the last three years, the Russell 1000 Growth Index has outperformed the Russell 1000 Value Index by over 55% on a cumulative return basis. If you count for compounding, that’s over 15% a year outperformance for growth stocks over value stocks. So, what should investors do? Should they rotate out of growth stocks and buy value stocks, or should they stick with the winning assets class? I would argue that investors should, in this environment, be well diversified between value and growth.

In our asset allocation portfolios, we maintain a long-term strategic allocation to both growth and value stocks, and from a tactical perspective, we are very close to neutral between the two. We have a slight overweight U.S. growth stocks at the moment. Let’s look at both sides of the coin.

First, the outperformance of growth stocks can, in great part, be explained by superior fundamentals. If you look at a chart of cumulative forward earnings over time, you’ll see that the gap in favor of growth stocks, especially recently during the COVID crisis, explains a lot of that massive return differential in their favor. In a low growth, low interest rates, low inflation environment, growth stocks tend to perform better, and they have a sector advantage being more exposed to technology in particular. So, from a secular perspective, there is an argument to be made to favor growth stocks because a lot of those companies are the disruptors rather than the disrupted.

But value stocks do look cheap in the current environment. It’s difficult to estimate forward earnings, but nonetheless, when valuations get extended like that, it’s like a coiled spring. It doesn’t take a lot of good news to get a rally. Also, we have done a study going back 90 years, where we’ve looked at 17 different sell-offs similar to the one we just had in terms of magnitude, and we found that generally speaking when the market recovers, value stocks tend to do better on average. In this market recovery phase, we haven’t seen value stocks outperform yet because of the nature of the shock.

So, those are the two sides of the coin. Fundamentals seem to favor growth, valuations favor value stocks. In that context, it makes sense for investors to stay close to neutral, well diversified between both value and growth stocks.