Capital Markets: Observations & Insights
Large Cap Growth is Inexpensive Relative to Large Cap Value Growth vs. Bond-like Equities
• Large cap growth has historically been at a ~40% P/E premium to large cap value but it is now only a 16% premium • Russell 1000 Growth is trading at P/E-to-growth of 1.4x vs. the Russell 1000 Value at 2.5x, which is the largest gap in over a decade
Russell 1000 Growth vs. Russell 1000 Value P/E NTM
Median ~40% Premium
Current 16% Premium
Source: FactSet, Bank of America as of 06/30/2016.
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