Will Value Stocks Outperform?
Investors,
The ongoing bull market has largely been characterized by leadership in growth stocks, technology stocks, and large/mega-cap stocks. In 2024, notably since June, we’ve seen market expansion occur rapidly and the cohorts of leadership have evolved.
Now, value stocks, financials, healthcare, small & mid-caps are leading the way.
The prior market leaders are still participating to the upside, but the market expansion has resulted in a broad-based momentum thrust with new leadership.
Just look at value stocks, represented by the Vanguard Value ETF $VTV:
The ETF has been making new ATH’s since January 2024 and hasn’t missed a beat all year, generating a return of +15.6% (not including the +2.29% dividend yield).
This Value ETF has a large-cap value profile with an unexciting list of top 10 holdings:
Broadcom ($AVGO)
Berkshire Hathaway ($BRK.B)
JPMorgan Chase & Co ($JPM)
Exxon Mobile ($XOM)
UnitedHealth Group ($UNH)
Johnson & Johnson ($JNJ)
Procter & Gamble ($PG)
Home Depot ($HD)
AbbVie ($ABBV)
Walmart ($WMT)
These are all brands that we’re familiar with, each of which have long-standing histories. They’re generally considered to be boring, uninventive, and even stale businesses; however, they are deeply entrenched in our everyday lives and are often hidden in plain sight.
But it seems that boring businesses are having their moment in the sun.
In this report, I will highlight what this means for investors and some individual ways to take advantage of this trend, if it continues to remain in place.
This report will cover broader themes that I’m paying attention to, as well as some individual names that I think are worth highlighting specifically, while also touching on some of the key trends in the S&P 500. In total, this report includes 16 original charts.
Without further ado, let’s begin…