Growth Or Value: What's In Style In The Second Half Of 2023

Sakorn Sukkasemsakorn

Judge Judy announces she’s ending show after 30 years

911 survivor says stranger helped her escape attacks

Originally posted on July 25, 2023

By William Davies, Global CIO

Transcript

I think it’s important that if we look over the past few years, we can identify periods when growth stocks have performed much more strongly, value stocks of for much more strongly. 2021 was a time for growth, ’22 was a time for value. And if we look quite simply, during those particular times – ’20 and ’21 – interest rates were low.

But as we move forward, we have to recognize that with rates now, fed funds rate above 5% – that is going to be a very different scenario for some of the companies trying to raise money as to when rates were close to zero. And so consequently, we’re going to see more companies with weaker balance sheets that will get into trouble, more companies where we see the slowdown affecting their sales and the strength of their positioning. Again, more challenged as we move forward. Typically, some of those companies would be in the value areas, in the more economy-sensitive areas. So we can see reasons why value may struggle a bit as we move forward.

But then let’s look at our core scenario, which is that growth – economic growth, that is – does not slow down as much as some people would fear. That actually could be positive for those more economy-sensitive companies, which may be discounting a worse scenario.

So I think as we move forward, it’s going to be much more balanced, the relative performance of value versus growth than it has been in recent years, which I think, again, is more constructive for stock pickers and more constructive for the market as a whole.

Use of products, materials and services available through Columbia Threadneedle Investments may be subject to approval by your home office.

With respect to mutual funds, ETFs and Tri-Continental Corporation, investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. To learn more about this and other important information about each fund, download a free prospectus. The prospectus should be read carefully before investing.

Investors should consider the investment objectives, risks, charges, and expenses of Columbia Seligman Premium Technology Growth Fund carefully before investing. To obtain the Fund’s most recent periodic reports and other regulatory filings, contact your financial advisor or download reports here. These reports and other filings can also be found on the Securities and Exchange Commission’s EDGAR Database. You should read these reports and other filings carefully before investing.

The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Management Investment Advisers, LLC (CMIA) associates or affiliates. Actual investments or investment decisions made by CMIA and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be appropriate for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that any forecasts are accurate.

Columbia Funds and Columbia Acorn Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA. Columbia Funds are managed by Columbia Management Investment Advisers, LLC and Columbia Acorn Funds are managed by Columbia Wanger Asset Management, LLC, a subsidiary of Columbia Management Investment Advisers, LLC. ETFs are distributed by ALPS Distributors, Inc., member FINRA, an unaffiliated entity.

Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.