Will value resurgence drive a Santa Claus rally? Insights from global index provider FTSE Russell

US equity markets have continued their Q4 surge, with market watchers hoping for a traditional Santa Claus rally as we approach the end of a tumultuous year.

by Editor-in-Chief

December 29, 2020

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Although, one untraditional factor, value stocks, has played a more influential role in the recent market rise.

According to global index provider FTSE Russell, long forgotten value stocks have led the recent rise for US large- and small-cap stocks, with a nearly 15% return for the Russell 1000® Value^TM Index and a 32% rise for the Russell 2000® Value^TM Index for the fourth quarter through December 18 US market close.

Mark Barnes, head of Americas investment research, FTSE Russell:

“It has been quite a long time since US equity investors found value stocks in their stockings, with a 14-year underperformance record for the value factor. Yet Value’s fortune took a turn in November as news of several COVID-19 vaccine breakthroughs ignited hope for a stronger global economic recovery and reflation, driving robust Value outperformance in most markets. And while it remains to be seen whether this resurgence in value stocks is sustainable, fourth quarter US index performance makes a strong case in point for the benefits of style diversification.”