Aussie value stocks appeal over global ones
Investors should consider investing in Australian value stocks over global ones as they offer a more diverse opportunity set and are less dependent on structural of geographic bets.
Martin Currie said Australian value stocks had seen an upturn in performance since the vaccine was announced last November and the world began to recover from COVID-19.
This was likely to lead to spreads tightening and value outperforming over growth equities.
A report by Morningstar found large-cap Australian equity value funds had outperformed large-cap Australian equity growth funds over the three months to 31 January, 2021, with an average return of 13.9% compared to 11.2% for growth funds.
Chief investment officer of Martin Currie Australia, Reece Birtles, said: “Many global value portfolios are reliant on narrow index positions in banks, energy and Europe versus the dominant platform, technology, healthcare and US stocks, whereas Australian value exposures are not dependent on structural or geographic bets, and offer more diverse sector opportunities.
“The Australian MSCI Value index has shown a significant upturn since the vaccine, a trend which is less evident in global indices.”
Value stocks highlighted by Birtles included Star Entertainment, Medibank Private and engineering firm Worley.
AUTHOR
Laura Dew
Recommended for you
Clime Investment Management has welcomed an independent director to its board, which follows a series of recent appointments at the company.
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
