Quality investing has outperformed value investing

Long_Equity
03-22

Over the last 15 years, quality investing has outperformed value investing.

• The MSCI's quality index has an average outperformance of 2.71%, compared to -2.32% for their value index.

• Quality has outperformed in 11/15 years, while value only managed 5/15 years.

• Quality delivered the lowest volatility (SD=4.36%).

Critics may argue that 15 years is a short time frame, but the consistency and lower volatility speaks for itself.

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $Dow Jones(.DJI)$

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Year 1 - you invest $20 and make $10

Year 2 - you invest $10 and make $5

Year 3 - you invest $5 and make $2.50

Your ROC is 50%, but your annualised growth rate is -50%.

That’s why ROC and growth both matter. Look for both.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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