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A Shift Toward Value

The tide may be turning for value stocks

Yoram Lustig Head of Multi‐Asset Solutions, EMEA; Michael Walsh Solutions Strategist, EMEA
T. Rowe Price,  Investment Insights, April 2021

Key Insights

  • As the rollout of coronavirus vaccines paves the way for a version of economic normalisation, global GDP growth in 2021 may potentially be the strongest in decades.
  • Investors may want to consider opportunities in asset classes such as value stocks, which could benefit from strong economic growth in particular because of their exposure to the Financials and Energy sectors.
  • While we expect value to outperform growth in 2021, maintaining a balance between the styles with a potential tilt to value could ensure diversification, mitigating the risk of a rotation back to growth.


A post‑pandemic economic recovery is underway, with millions of COVID-19 vaccines administered globally every day. The population of the US, the UK and other countries at the forefront of vaccine rollouts is rapidly gaining protection against the coronavirus, and vaccination campaigns in a number of other countries, while slower, appear to be progressing in a positive direction. With the successful rollout of vaccines, economies are expected to gradually re-open, consumer confidence is likely to improve - bringing demand with it - and a recovery is likely to ensue.

As we move toward a version of normalisation – buoyed by unprecedented fiscal and monetary stimulus – many economists expect global GDP growth in 2021 to be the strongest in decades. 2021 has already seen rising inflation, rising yields on government bonds, increasing commodity and energy prices. Sustainable growth could boost these further. We think investors may want to consider opportunities in segments that were neglected during the eruption of the pandemic and are now likely to benefit from renewed economic growth, such as small‑cap and value stocks, with particular emphasis on the latter.

Access the full report from T. Rowe Price