We expect large growth stocks to continue to outperform other asset classes and the broader US equity market, even as market leadership changes, leading to less concentrated performance, writes Chris Fay.
- Large growth companies are among the most innovative and disruptive ones in the world. These companies are well-established, with strong financial foundations and experienced management teams that have consistently delivered robust capital appreciation.
- They are generally less vulnerable to economic downturns than small, mid-sized or value stocks through their globally diversified businesses.
- The Russel Growth index has returned about 400% over the last 10 years with a roughly 16% annual growth rate, which is higher than many other asset classes.
- We see an opportunity outside of the mega-cap stocks in benchmarks, looking for improving fundamentals, valuation dislocations, high capital spending, and a changing interest rate environment to lead to a more varied leadership among other growth sectors.
