Presenters |
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Tommy Garvey |
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Ben Inker |
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John Thorndike |
Overview
In this session, Ben Inker speaks about value opportunities today compared to the market environment a year ago during our last Investor Conference. Ben defines “growth traps” and why they are at least as destructive as value traps, if not more. John Thorndike follows with a deeper dive into regional equity performance and valuations and their implications for opportunities and portfolio construction going forward.
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Key Points
- A year ago, value looked historically cheap across many measures. We implemented our Equity Dislocation trade (long value/short growth) and were pleased with investor interest.
- The concern about value traps is real. But the lesser discussed growth traps present even more risk to investors.
- Broadly, value outperformed over the last year, but with a high level of volatility.
- Over the last decade, the U.S. and Japan delivered on fundamentals while Europe and emerging markets disappointed mildly.
- The primary driver of U.S. exceptionalism over the last decade has been multiple expansion, leaving non-U.S. markets cheaper than the U.S.
- Value opportunities are an important component of our portfolios via long positions in non-U.S. value stocks and global exposure to long/short strategies.
The Value Opportunity Today
The case for looking different
As of 10/22/2021 | Source: GMO
*Formerly Cyclical Focus Strategy
The above information is based on a representative account in the Strategy selected because it has the fewest restrictions and best represents the implementation of the Strategy. Weightings are as of the date indicated and are subject to change. The groups indicated above represent exposures determined pursuant to proprietary methodologies and are subject to change over time. Totals may vary due to rounding.
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