The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
Was in Westminster on Thursday at the annual London Value Investor conference, joining 450 beleaguered portfolio managers who specialise in this out-of-favour style. They’ve had a torrid time of late as, for a full decade now, value underperformed the alternatives. As a result, the public’s savings have flowed to competitors who focus on momentum or growth shares.
Research by Nick Kirrage, co-head of the Value Investing team at Europe’s biggest asset manager Schroders, illustrates the point. In his keynote to the conference Kirrage said value funds hold a mere 10% of money invested into actively managed equity portfolios – “worse than during the dot com bubble.”
Hindsight tells us everything reverts to the mean. So, after such a long dry spell, it can’t be too long before the pendulum swings back to value stocks, those whose prices are at deep discounts to their underlying assets. Nothing stays fashionable forever.
Over the next couple weeks I’ll be focusing on the subject in my Rational Perspective podcast. There are now more than 30 episodes of the podcast so it you haven’t discovered it yet, plenty to catch up on. It’s free and by subscribing you’ll be reminded of every fresh instalment. Sign up by clicking here.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.