Macro Minutes: Large Growth vs. Small Value

We believe large growth remains in a favorable position, almost as if the bull market never really ended, and the March drawdown instead behaved more like a severe correction.

Key Points

  • Small value tends to lead early in bull markets, as the economy typically experiences the most rapid profit growth as it bounces out of recession. Conversely, large growth tends to lead late in bull markets, as the pace of profit growth decelerates, meaning equity gains are more driven by future expectations.
  • The March drawdown behaved more like a severe correction that began with a rapid decline, and then developed a v-shaped formation in the subsequent recovery. Breadth further narrowed, which is a phenomenon more frequently occurring in market corrections rather than bear markets. Following similar historical occurrences, market leaders going into the correction generally continue outperforming in the subsequent recovery.
  • Forward relative returns for growth has been favorable as the yield curve is flat.


*The foregoing information constitutes the views of Fisher Investments based on information believed to be reliable. There can be no assurances that Fisher Investments will continue to hold these views. These views may change at any time based on new information, analysis, or reconsideration.
About Fisher Investments

Founded in 1979, Fisher Investments is an independent, fee-only investment adviser with $197 billion under management.* Fisher Investments maintains four principal business units, Fisher Investments Institutional Group, Fisher Investments Private Client Group, Fisher Investments 401(k) Solutions Group and Fisher Investments Private Client Group International, which serve a global client base of diverse investors. The clients of Fisher Investments and its affiliates include over 100,000 clients. Founder and Executive Chairman Ken Fisher’s “Portfolio Strategy” column for Forbes ran from 1984 through 2016, making him the longest continually running columnist in the magazine’s 90+ year history. He has also authored several New York Times bestsellers on finance and investing. (*As of 3/31/2022)