Is it possible for the aggregate index to have a higher return than either the growth or value component?
Yes, it is possible, but unusual. Because the aggregate index is equal parts growth and value, the return of the aggregate index will typically be midway between the returns of the style indexes that comprise it over a given period. However, because the style indexes are rebalanced to be half the aggregate index only each six months, it is possible, under certain circumstances, for the aggregate index to outperform the style components. For example, if value outperforms growth for six months, at the end of the six month period the cumulative return of the aggregate index will be closer to value than growth because the weight of the value component increased over the six months that it outperformed. The indexes are rebalanced so 50% of the aggregate index is in growth and 50% in value. If growth then outperforms value for six months, the 12 month cumulative aggregate return can be higher than either value or growth.
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