Nir Kaissar, Columnist

If Value Stocks Are Toxic, Why Aren’t Junk Bonds?

They are essentially the same investment in different parts of the capital structure.

January 30, 2020 at 10:00 AM UTC

Nir Kaissar is a Bloomberg Opinion columnist covering markets. He is the founder of Unison Advisors, an asset management firm.

The home of value stocks.
Photographer: Jean-Christophe Verhagen/AFP/Getty Images

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If you want to know why U.S. investors are down on value stocks, just consider junk bonds.

Last year was another miserable one for value investing. The Russell 1000 Growth Index outpaced the Russell 1000 Value Index by 9.8 percentage points, including dividends. It couldn’t have come at a worse time because value investors were already reeling from a multiyear drought. Growth beat value in eight of 12 years from 2007 to 2018, more than doubling the return from value during the period.