Style indices have behaved differently internationally and in the U.S. This year, U.S. growth stocks, represented by the S&P United States BMI Growth (up 14.8% as of the end of September 2025), outperformed the broader U.S. market (up 14.4%). Outside the U.S., the S&P Global Ex-U.S. BMI Value (up 30.7%) has performed better (see Exhibit 1). What can we learn about this?

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First, how are value and growth defined for the S&P Global BMI Series? As per the Global BMI methodology, stocks are classified based on a growth-to-value score ratio. The scores are calculated using four standardized financial metrics for value and three for growth (see Exhibit 2). In short, value focuses on undervalued stocks, while growth cares more about potential.

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This year’s dominance of growth in the U.S. is a story of two words: artificial intelligence. Generally, growth indices tend to be skewed to the Information Technology and Communication Services GICS^® sectors. As of the end of September, the weight of IT in the S&P United States BMI Growth was 45.9% (see Exhibit 3). As the AI rally has continued this year, it is common that an index with a high weight in these stocks rises. Internationally, the S&P Global Ex-U.S. BMI Growth (up 24.9%) performance was also mainly attributed to IT stocks.

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While growth slightly outperformed value in the U.S., internationally, the differential of value over growth was higher as market participants increasingly looked for undervalued stocks.

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The S&P Global Ex-U.S. BMI Value ended 2024 below its 10-year average P/E ratio (see Exhibit 4), though it did end September slightly above its 10-year average. This index tends to be heavy on Financials and Industrials (see Exhibit 5), with the former benefiting from strong bank earnings, lowering interest rates and resilient economic activity, and the latter by increased defense spending, especially in Europe.

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However, this dynamic doesn’t necessarily always hold. Since 2020, U.S. growth mostly outperformed the broader U.S. market, and value performed better internationally, but Exhibit 6 shows that style rotation has happened. Economic cycles, valuation disparity and investor sentiment play an important role in the dominance of one style over the other.

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The performance of style strategies has not always been the same across regions. This year, specific conditions have led to growth’s outperformance in the U.S. and value’s outperformance internationally. Style dominance trends go ’round and ’round before fading into view again. Only time can tell which remains—for now.

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