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Chart of the week

As rates reverse, a growth renaissance?

As rates plunged in March, growth stocks spiked. This week’s chart looks at the ever-shifting changing growth-value dynamics in recent years.

March 31, 2023 | 2 minute read

Ratio of value to growth stock performance

Source: Bloomberg Finance, L.P, as of March 30, 2023. Based on the S&P 500 Pure Value Index and S&P 500 Pure Growth Index.

  • U.S. stocks have risen more than 5% in the first quarter of 2023, as investors have shaken off a range of macro headwinds, and focused instead on a gradual easing in inflation, resilient economic growth and, recently, a repricing of Fed rate expectations materially lower.1
  • As the chart shows, U.S. growth stocks have led market performance this year after being decimated in 2022. The trend accelerated in recent weeks alongside plummeting Treasury yields amid the collapse of Silicon Valley Bank (SVB) and Signature Bank.
  • The swift change in market leadership between value and growth stocks has occurred alongside similar reversals between international and U.S. stocks. International stocks began to reassert themselves in Q4 2022, and have slightly outperformed YTD, despite some reversion toward growth-oriented U.S. stocks.  
  • Rapid changes in investor sentiment and, in turn, market leadership highlights the importance of flexibility and active management in the current market environment.

  • Bloomberg Finance, L.P, as of March 30, 2023. U.S. stocks represented by the S&P 500 Index.

The chart of the week and any accompanying data is for informational purposes only and shall not be considered an investment recommendation or promotion of FS Investments or any FS Investments fund. The chart of the week is subject to change at any time based on market or other conditions, and FS Investments and FS Investment Solutions, LLC disclaim any responsibility to update such market commentary. The chart of the week should not be relied on as investment advice, and because investment decisions for the FS Investments funds are based on numerous factors, may not be relied on as an indication of the investment intent of any FS Investments fund. None of FS Investments, its funds, FS Investment Solutions, LLC or their respective affiliates can be held responsible for any direct or incidental loss incurred as a result of any reliance on the chart of the week or other opinions expressed therein. Any discussion of past performance should not be used as an indicator of future results.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

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