Key points
- Lower P/E ratios than growth shares.
- Have tended to beat growth shares when rates rise.
- Common in financials, energy and industrials.
Example
Because more of a value company's worth comes from profits today rather than far in the future, its shares are usually less sensitive to rising interest rates.
In history
Value led in 2022 as energy and financials benefited from higher rates and commodity prices, reversing a decade of growth dominance.
Related terms