Industry Balanced Value vs. Growth Stocks

• In Event: Emerging Research and Research Interaction 5

Abstract

We study the performance of value vs. growth stocks across time horizons and in a sector balanced portfolio context. We find value stocks outperform growth stocks in all three downside risk measures and risk adjusted returns in the long run. So is it still beneficial to add growth stocks to a portfolio? Interestingly, we find that most of the diversification benefit comes from sector diversification rather than style diversification, which implies that it is more beneficial to have a sector balanced value portfolio rather than adding growth stocks into the value portfolio.

Authors

• Jia Wang, Rowan University

• Zugang Liu, Penn State University – Hazleton

• Ben Branch, University of Massachusetts-Amherst