This week's sharp rotation exposed how vulnerable investors had become to moves of this nature, said Peter Oppenheimer, Goldman's global equity chief.
, the more definitive takeaway is that investors will be more vulnerable to swings as violent as the one they experienced over the past few days.
On a global scale — using the MSCI World index as a benchmark — growth has been outperforming value since the mid-2000s, in the longest and most powerful stretch since the early 1970s, according to data compiled by Goldman Sachs.at Nomura observed that both the long and short end of the Russell 1000 momentum factor contributed to its recent strong performance.
If that's the case, what factors caused the shift that took place this week, and why may they not stick? Oppenheimer provided answers to these two questions. It seems counterintuitive that growth stocks would be punished when expectations for the future were improving. Oppenheimer noted, however, that a huge part of their appeal had been a hunt for"pure" growth themes like US big tech, at a time when global profits were lackluster. This hunt also raised the premium for so-called quality stocks with strong balance sheets and cash flow.
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