FYI: Historically, small value stocks have been the best performing equity asset class. But the last 10 years has been a period of dismal performance. With their valuations now at a historically attractive level, small-value stocks are priced to outperform.
From 1927 through June 2019, the Fama-French (FF) US Small Value Research Index returned 14.5% per annum, outperforming the S&P 500 Index by 4.3% per annum. (All FF data is from Ken French’s data library.) In addition, the asset class outperformed after the publication of the famous Fama-French paper “The Cross-Section of Expected Stock Returns” in 1992. For example, from inception in April 1993 through June 2019, the first passively managed fund to provide systematic exposure to the asset class, the DFA US Small Value Fund (DFSVX), returned 11.0% per annum (the Fama-French US Small Value Research Index returned 12.4% per annum), outperforming the Vanguard 500 Index Fund (VFINX) return of 9.4% per annum by 1.6 percentage points per annum.
But small value has performed poorly in the decade-plus since 2009.
Regards,
Ted
https://www.advisorperspectives.com/articles/2019/08/08/small-value-stocks-are-cheapM* Small Cap Value Fund Returns: (Average SCV Fund Up 8.29% YTD)
http://news.morningstar.com/fund-category-returns/small-value/$FOCA$SV.aspx
