By clicking on the chart below, you'll be able to see comparative year-to-date returns for EAFE (Europe, Australasia, Far East) value stocks (EFV); EAFE growth stocks (EFG); S&P 500 value stocks (IVE); and S&P 500 growth stocks (IVW).

Here are a few noteworthy observations:

1. Across the world, equities have retraced most of their year-to-date losses (though they remain below their 2007 peaks);
2. Growth has been outperforming Value among the EAFE stocks since the January market lows, and now in the last month has outperformed Value among U.S. stocks;
3. U.S. Value stocks were relative performance leaders during the market decline, but have been laggards since the March lows;
4. EAFE stocks were relative performance laggards during the market decline, but have been leaders since the March lows.

I believe these results suggest an improvement in overall market sentiment, which has led investors away from safety (large cap U.S. value) and back toward growth themes. That is not to say that the key bear market themes (weak housing, credit concerns) have gone away; only that global markets are according these themes less weight in their asset allocations.

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Brett Steenbarger

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