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RE: Value and growth index funds

Is there overlap between the portfolios of growth and value index funds, or is each company assigned strictly to one index or the other?


  • It depends on the methodology of the index in question.

    For example, S&P has pure style indexes. "There are no overlapping stocks, and stocks are weighted in proportion to their relative style propensity" (not pure cap weighted).

    On the other hand, the way its "regular" Value indexes are constructed, "The middle 34% of [the market] consists of companies that have similar growth and value ranks. Their market cap is [split between value and growth indexes] based on [their relative growth and value scores]."

    So the stocks in the blend third of the market are represented in both S&P's "regular" value and growth indexes.

    S&P U.S. Style Indices Methodology:

    Above is link to ETFRC's free (registration required) ETF overlap tool. For IJJ and IJK (mid cap value and growth) the tool says that there is 29% overlap.
  • RPG and RPV have zero overlap, and each has 20-24% overlap with RSP.
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