“This trend is partly due to a weak fourth-quarter earnings season, which saw consensus declines led by technology and growth stocks in Korea, Taiwan and China,” said Nenad Dinic, equity strategist at Bank Julius Baer. in Zurich. “By contrast, commodity-driven stocks in Latin America and EMEA have seen strong improvement in return metrics.”
Value stocks are typically defined by a trading price that is relatively low compared to performance in some fundamental metrics, such as price-earnings or price-to-book. Growth stocks, on the other hand, tend to be more expensive, and investors bet that their sales and profits will grow faster.
The Value Stock Index for Emerging Markets is trading at a price that is 8.6 times its members’ projected earnings. The corresponding multiple for growth stocks is 18.
Greater Catalysts
The MSCI Emerging Markets Index is targeting a 1.3% drop in April with the growth stocks subgroup losing roughly double that, while the value stocks segment is little changed. The outperformance for value stocks is the largest since September.
