Growth vs. Value in Q3


According to Reuters, U.S. mid-cap growth funds, EM stocks and inflation-protected bonds were among the winners for U.S. investors in a turbulent third quarter after the benchmark S&P 500 hit a record high. However, at the end of September,  rising Treasury yields and debt negotiations in Washington have weighed on investor sentiment. 

Growth funds investing in U.S. equities outperformed their value-focused peers in the quarter – as a COVID-19 resurgence over the summer encouraged investors to revert back to some of the big technology stocks that led markets during last year’s coronavirus lockdowns. 

The average large-cap U.S. growth fund gained 4.6% – while the average large-cap value fund gained 0.9%, according to Morningstar. The S&P 500 is on track for a 1.4% gain, after rising by nearly 8.2% in the second quarter.

Investors are now gauging to what extent the concerns that erupted in recent weeks will impact U.S. stock performance for the rest of the year. Those include a tilt from the Federal Reserve that has boosted Treasury yields, the meltdown of the property developer China Evergrande Group and a potential debt ceiling battle among U.S. lawmakers. 

Source: Reuters

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