Although large cap growth stocks have been out of favour for several years, the evidence suggests they are due an impressive re-rating by the markets
Growth stocks and growth-style investment funds have been underperforming their value equivalents since the bursting of the dotcom bubble in 2000. From 11 March 2000 (the day the technology-heavy Nasdaq began its decline from record highs) through to the end of 2005, US value funds posted a cumulative return of plus 8.98% (in US dollars), compared with minus 5.38% for growth funds, according to investment research company Morningstar. Large-cap growth funds performed even worse. Growth funds invest in stocks - often in technology, healthcare or retail - that cost more relative to earning...
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