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Part 1: Seeking Value—at the Expense of Growth

Sponsored by Lockwood | Advisors appear to be shifting away from growth stocks toward value positions—perhaps in response to the strong outperformance of growth stocks ever since the recent financial crisis.

Advisors appear to be shifting away from growth stocks toward value positions—perhaps in response to the strong outperformance of growth stocks ever since the recent financial crisis. In fact, nearly 4 in 10 (39%) advisors say adding domestic large-cap value stocks to client holdings is one of their top two expected portfolio shifts over the next 12 months. This was the most commonly cited addition. Meanwhile, nearly 3 in 10 advisors (28%) named domestic large-cap growth equities as one of their top two expected portfolio decreases over the same time frame—the most commonly cited decrease.

The shift may already be underway: 44% of advisors report that large-cap value equities currently represent a meaningful or significant part of client holdings, while just 36% say the same for large-cap growth. This outlook—favoring value over growth—holds true for advisors from large firms as well as advisors from independent firms. That said, independent advisors expect to make a more dramatic move away from growth stocks than other advisors. Among this group, 24% expect that they will see the greatest decreases in domestic large-cap growth stocks over the next 12 months, compared with just 15% among large firms.

Advisors are not planning to abandon growth stocks completely, however. For instance, 16% of advisors at independent firms expect that their second greatest increase in assets over the next 12 months will be in domestic large-cap growth stocks.

NEXT: Mutual Funds over ETFs

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