The return of value investing
S&P Dow Jones Indices says in the past year value investing completed its first year of outperformance in five; and the second year of outperformance in the past 10 years. An analysis of the New Zealand market (see graph below) shows that value outperformed last year.
PM Capital founder and chief investment officer, Paul Moore, firmly believes that value is about to become the investment style to follow. He says the results from last year show that the shift to value is just starting.
“We believe a major rotation from growth to value stocks is in its infancy – and that this opportunity will play out over a typical 10-year cycle.
“We continue to see opportunities in value segments of the market, notably banks and commodity stocks, some of which trade at record-low relative valuations.”
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