Growth vs. Value Stocks: Returns by Decade Since 1927
Growth stocks are companies whose earnings are expected to grow fast, so investors pay a high price for each dollar of today's profits or book value. Value stocks are the opposite: cheaper relative to their earnings and assets, often mature businesses that pay dividends. Which has done better depends entirely on when you look. From 1927 to 2025, value stocks returned 13.0% a year and growth stocks 10.1%; since 2007 growth has led, 13.1% against 9.0%. Here is the record by decade and year, from the Fama-French data at Dartmouth, and what it means for choosing funds.
The Short Answer
- Over the very long run, value won. From 1927 to 2025 the cheapest 30% of U.S. stocks (by book-to-market) returned 13.0% a year and the most expensive 30% returned 10.1%, with dividends reinvested.
- Recently, growth won. From 2007 to 2025 growth returned 13.1% a year and value 9.0%, led by large technology companies.
- Leadership changes, with no warning. Value beat growth in 60 of the 99 years, but growth led in the 1990s and 2010s and value in the 2000s.
- Owning both is the simple answer. An S&P 500 or total market index fund holds growth and value stocks in market proportions.
What Makes a Stock Growth or Value
| Growth stocks | Value stocks | |
|---|---|---|
| Price vs. earnings and book value | High | Low |
| Expected earnings growth | Fast | Slow or steady |
| Dividends | Low or none; profits reinvested | Often higher |
| Main risk | Growth disappoints and the high price falls | The stock is cheap for a reason and stays cheap |
Index providers sort stocks with formulas. In the academic data used on this page, Eugene Fama and Kenneth French rank U.S. stocks by book-to-market ratio (the company's book value divided by its stock market value) each June: the 30% with the lowest ratio are growth, the 30% with the highest are value. Fund indexes use their own rules: S&P classifies S&P 500 companies as growth using sales growth, the ratio of earnings change to price, and price momentum, and as value using the ratios of book value, earnings and sales to price. The same company can move between the two over time.
Growth vs. Value by Decade
| Decade | Growth (low book-to-market 30%) | Value (high book-to-market 30%) | Winner |
|---|---|---|---|
| 1930-1939 | 1.6% | −3.2% | Growth |
| 1940-1949 | 6.9% | 17.0% | Value |
| 1950-1959 | 17.7% | 22.0% | Value |
| 1960-1969 | 7.9% | 12.1% | Value |
| 1970-1979 | 3.8% | 13.7% | Value |
| 1980-1989 | 15.0% | 20.6% | Value |
| 1990-1999 | 19.2% | 16.4% | Growth |
| 2000-2009 | −1.2% | 6.0% | Value |
| 2010-2019 | 15.1% | 11.2% | Growth |
| 2020-2025 | 17.7% | 15.8% | Growth |
Value led in six of the ten decades, often by a wide margin: in the 1970s it returned 13.7% a year against 3.8% for growth. Growth's best stretches came in the 1990s, ending with the dot-com peak, and from 2010 on. The 2000s show how quickly it can turn: growth stocks lost money over the decade (−1.2% a year) while value returned 6.0%.
The Last Ten Years
| Year | Growth | Value |
|---|---|---|
| 2016 | 9.0% | 27.3% |
| 2017 | 29.1% | 17.0% |
| 2018 | −0.3% | −14.5% |
| 2019 | 33.7% | 25.9% |
| 2020 | 36.6% | −2.7% |
| 2021 | 24.8% | 38.0% |
| 2022 | −25.8% | 3.1% |
| 2023 | 37.4% | 13.3% |
| 2024 | 29.5% | 18.6% |
| 2025 | 17.9% | 29.6% |
2022 is the clearest example of the swing: when interest rates jumped, growth stocks fell 25.8% while value stocks gained 3.2%. In the next two years growth stocks rose 37.4% and 29.5%. Over 2016 to 2025 as a whole, growth returned 17.4% a year and value 14.5%.
How Fund Managers Did
Picking a style does not help much if the fund trails its own index. S&P Dow Jones Indices' SPIVA scorecard, with data to June 30, 2026, found that 93.0% of large-cap growth funds trailed the S&P 500 Growth index over 10 years and 100% over 15 years. Large-cap value managers did better over three years (41.1% trailed) but 82.3% trailed over 10 years. See active vs. passive investing for the full table.
Which Should You Choose?
- Not sure: own the whole market. An S&P 500 index fund (see SPY vs. VOO) or a total market fund already holds both styles.
- Want to tilt toward growth: a low-cost growth index ETF. Compare VOO vs. VOOG and VUG vs. VOO to see how much more concentrated in technology they are.
- Want to tilt toward value or income: a value or dividend index fund; VTV vs. VYM compares two of the largest.
- Whatever you choose, decide the split in advance and rebalance rather than chasing last year's winner. Growth-heavy funds can be held tax-efficiently in a retirement account or a taxable account; value funds pay more dividends, which are taxed each year in a taxable account.
For researching individual companies, see stock analysis tools; to track your growth and value split, see portfolio trackers. Most style funds are ETFs.
FAQ
Do value stocks outperform growth stocks?
Over the full record from 1927 to 2025, yes: 13.0% a year against 10.1% in the Fama-French data. But growth has led since 2007, and nobody has found a reliable way to predict when leadership will switch.
Is growth or value better for retirement?
Most retirement savers do best owning both through a broad index fund. Near retirement, some people tilt toward value and dividend stocks for steadier income, but bonds and cash do more to reduce risk than a style tilt does.
Why did growth stocks fall so much in 2022?
Much of a growth company's value comes from profits expected far in the future, and higher interest rates reduce what those future profits are worth today. Growth stocks fell 25.8% in 2022 while value stocks rose 3.2%.
Is an S&P 500 fund growth or value?
Both. It holds all 500 companies weighted by size, so its style follows the market. In recent years large technology companies have made it lean toward growth.
Sources
- Kenneth R. French Data Library, Dartmouth Tuck, Portfolios Formed on Book-to-Market (file created from the August 2026 CRSP database, downloaded October 23, 2026). All growth and value returns on this page are from this file or our calculation from it.
- S&P Dow Jones Indices, SPIVA U.S. results, data as of June 30, 2026
- S&P Dow Jones Indices, S&P 500 Growth and S&P 500 Value index descriptions (classification factors)
- SEC Investor.gov, Stocks
This article is for general information and is not investment advice. Returns are for research portfolios, not funds you can buy; they exclude fees and taxes, and past results do not predict future results. Figures checked against the sources above on 2026-10-23.
