This Is What Small Value Stocks Do

The chart above looks at the long-term growth of US small-cap value stocks in relation to the overall market (S&P 500 Index) and inflation (CPI) since 1927.  Small value did +13.5% per year compared to 10% for the S&P 500 and 3% for inflation.  This was enough to propel a $1 in small value to $89,866 compared to $5,473 for the S&P 500 and $14 for inflation.

What relevance to modern investors is a 90+ year sample of historical returns that includes decades from before you were even born?  Plenty, it turns out.  Over the last 5 years, the DFA US Small Value Fund has compounded at +13.7% per year, the DFA International Small Value Fund has returned +13.5%.

We don't know exactly what future returns will be.  But ignore the past at your peril.

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Past performance is not a guarantee of future results. Index and mutual fund performance shown includes reinvestment of dividends and other earnings but does not reflect the deduction of investment advisory fees or other expenses except where noted. This content is provided for informational purposes and should not to be construed as an offer, solicitation, recommendation or endorsement of any particular security, products, or services.