SMALL-CAP VALUE: READY TO OUTPERFORM LARGE-CAP GROWTH? After 15 years of underperformance, small-cap value stocks are now bottoming relative to large-cap growth ones. Indeed, the small-cap-value-to-large-cap-growth-stocks ratio has now made a double bottom where it bottomed in 2000, at the peak of the DotCom bubble, before a decade of outperformance for small-cap and value stocks. While reaching its former top would imply a 350% outperformance for small-cap value stock, this could be achieved by a combination of higher small-cap value and lower large-cap growth stocks. Time to focus on the next decade's most likely winner. $IJS and $QQQ used as proxies.
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