Insights Institutions

When interest rates rise, tilt towards value and away from growth? Not so fast!

Explore why style tilting is hard to do well, and indicators that reliably identify periods of Value or Growth outperformance are rare.

Jerry Lu, Michael Sager and David Wong Jan. 24, 2024 2-minute read

Conventional wisdom asserts that changes in interest rates are a reliable determinant of performance differentials between Value and Growth equity investment styles.
Using more than four decades of data, we find this assertion to be false.
Style tilting is hard to do well, and indicators that reliably identify periods of Value or Growth outperformance are rare.
We favour a Core investment approach that strategically blends many investment styles within a holistic portfolio equity allocation.

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Written by

Jerry Lu, CFA, FRM, CAIA
Senior Analyst, Portfolio Solutions, Total Investment Solutions

CIBC Asset Management Inc.

Michael Sager, PhD

Managing Director and Head, Multi-Asset and Currency Management

CIBC Asset Management

David Wong, CFA®, FRM®
Chief Investment Officer, Managing Director and Head of Total Investment Solutions CIBC Asset Management