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Their data show that large value stocks have returned 10.8% per annum compared with 8.7% for large growth stocks, and small value stocks have returned 13.9% versus 9% for small growth stocks.
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Portfolios that hold a higher concentration in small-cap stocks and value stocks have more risk than the market as a whole.
Here we have, on a bigger scale, a favourite debate of stockmarket strategists over whether growth stocks or value stocks give the bigger return.
We want to have a balance between growth stocks and value stocks, because those two styles are very consistently good hedges to one another.
Style characteristics also help define market cap, although the signals can conflict depending on what factor is used to differentiate growth stocks from value stocks.
So, we still favor growth-oriented stocks over value-oriented stocks.
One research company that has created a stock screen of dividend-growth stocks is Value Line, whose list includes stocks that are comparatively low-risk investment choices.
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The portfolio is tilted to value stocks using a second value index fund.
Because firms that pay dividends tend to see more value in shipping cash to shareholders rather than reinvesting profits, high-dividend stocks tend to perform best when value stocks do.
Conversely, many growth stocks were at one time value stocks.
However, at this time, we believe there are still many more attractive stocks for value investors.
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This causes sin stocks to be priced as perpetual value stocks, with the low valuations and fat dividends that this entails.
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In the short term, either investment style can produce consistently good returns: growth stocks predominated in the 1990s, value stocks have done better in the past five years and there are those who think the tide is about to turn back now.
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Stocks that pay significant dividends are a subset of value stocks.
You have to work that much harder to build in value, to get stocks below their intrinsic value.
And with growth stocks way ahead and leading in the derby, the bulls on value are convinced that value stocks are among the most undevalued group in the market, and should start to outpace their rivals.
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Value stocks had lowest prices relative to earnings, cash-flow and book value and the highest cash dividends.
Joel Dickson, head of Vanguard Group's active quantitative equity department, says focusing exclusively on dividend stocks is a mistake, because it can leave investors overexposed to large-company value stocks.
Most country funds, like other index funds, are market-weighted, meaning their exposure to different stocks is based on the total value of the stocks' shares outstanding in comparison with the market capitalization of other shares in that market.
They studied the data on the top 1, 000 stocks according to market value from 1968 to 2008, sorting the stocks each month into five portolios from least risky to riskiest.
It targets large firms with solid cash flows and strong yields when looking for value stocks.
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See Winning with Small Value Stocks on my research website for details and figures.
We searched for value stocks among the companies highlighted in our recent feature on well-known brands.
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