The rotation into value stocks spurred by the global economic recovery is mostly over, but investors should expect near-term outperformance of value names before growth stocks regain market leadership by the end of 2021, according to Goldman Sachs.
“History, valuations, positioning, and economic deceleration indicate that most of the rotation is behind us,” Goldman analysts led by Ben Snider said in a recent note.
Following a long period of outperformance, growth stocks have recently taken a back seat to value stocks, which have soared as investors position for the economic recovery from the COVID-19 crisis. How much further the “growth unwind” lasts is among the most common questions the bank fields from clients, the analysts wrote.