Pivot to Value Stocks in Asia May Fail to Match U.S.

Any pivot toward value stocks from their growth counterparts in Asia will likely be less dramatic than in the U.S. because of the more evenly distributed equity rebound in the region.

An equal-weighted gauge of the MSCI Asia Pacific Index has outperformed its capitalization-weighted version this year by about 2 percentage points while the U.S. equivalent is underperforming the S&P 500 by about 11%. Meanwhile, the Federal Reserve’s recently acquired comfort with higher inflation and positive sentiment toward a coronavirus vaccine has so far failed to inspire a noticeable rebound in cyclical-heavy equity gauges in Singapore, Indonesia and Philippines.