Since late August value style equities have outperformed their growth counterparts. Except for a few brief periods over much of the last six years, the growth style has dominated the value style. In late 2015 through late 2016 value dominated growth as seen in the below chart. In a post I wrote several years ago, 2015 Was A Year For Growth Stocks And Only A Handful Were Needed, I also noted how dominant the growth style had been and the possibility of a value style rebound. As fate would have it, the pure value style did outperform pure growth in 2016 by more than 15 percentage points.

As 2019 seems to be coming to an end quickly, value is outperforming growth again and this might be sustainable into 2020. For value to have an edge over growth though, financials and consumer discretionary stocks will likely need to be strong performers. As the below table shows, financials and consumer discretionary stocks, as a group, account for 50% of the Pure Value Index (RPV.) In 2016 these two sectors accounted for more than half of value's outperformance and at that time the two sectors were 40% of the Pure Value Index. Additionally, on a relative basis, if technology and healthcare stocks are laggards in 2020, this will benefit the Pure Value style as the two sectors are underweight in the pure value style relative to the pure growth style.

With an economy that seems poised to avoid a recession in the coming year and a steepening yield curve, both the consumer and financial sectors would benefit in that kind of environment. If this does play out, value just might be an outperforming strategy over the next year or so.