The Performance Of Value Stocks And Growth Stocks: The Hong Kong Stock Market 1981-2005

Abstract

This study finds that value stocks outperformed growth stocks in the case of the Hong Kong market over the period 1981 to 2005. It also finds that this is the case for the two sub-periods before and after the Asian financial crisis in 1997. Value stocks continued to outperform growth stocks after allowing for the firm size effect. The difference in return between value stocks and growth stocks increased when equally weighted portfolio returns were compared with value-weighted returns. The results were mixed when comparing risk adjusted returns using standard deviation as risk measure.

The results of this study are in line with a number of international as well as South African studies.