- Corporate earnings growth and earnings estimates remain in favour of US Value stocks. US Value enjoyed double-digit EPS growth, outpacing US Growth last year. Earnings revision also diverged, as Value enjoyed big upgrades while Growth suffered from drastic downgrades.
- US Value continues to trade at abnormally cheap levels relative to history, US Growth, and the market (gauged by S&P 500). This supports our belief that US Value has room to re-rate higher, backed by fundamentals and a supportive macro backdrop.
- The US Value composition also provides a good blend of i) cheap, defensive companies from sectors like healthcare, consumer staples, and utilities; as well as ii) exposure to potential sectoral winners, supported by thematic shifts like high-for-longer rates, energy shortages, and de-globalisation.
- Aside from the macro setup, fundamentals and valuations continue to support the performance of US Value entering 2023. US Value remains our preferred approach for exposure to US equities. We recommend the JPMorgan Funds - US Value A (acc) USD.
Chart 1: After a decade of underperformance, Value is the underdog no more
Support from earnings fundamentals and relative earnings strength
Chart 2: Corporate earnings growth for US Value has been strong over the past few years
Chart 3: The US Value and Growth composition is vastly different

Chart 4: Divergence in EPS estimates in FY22. Unlike US Growth, Value saw big EPS upgrades last year
Value in US Value
Chart 5: US Value continues to trade at a wide discount to Growth, even after last year’s strong outperformance
Chart 6: US Value, the already “cheap” expression for US equities, remains much cheaper to the S&P 500 and US Growth as compared to history
US Value a blend of cheap, defensive companies with potential sectoral winners
US Value leadership to continue
The Research Team is part of iFAST Financial Pte Ltd
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