Value-based investing back on the cards
Market evidence is mounting, with indicators showing that economies have reached an ‘inflection point' characterised by the weakening of growth stocks which could see the return of value-based investing, according to Perennial Value.
Perennial Value managing director, John Murray, said that value investment had dropped out of favour in recent years, even with evidence of strong relative long-term performance and the weakening of growth and defensive stocks.
"Defensive and growth stocks are currently looking expensive," he said.
"Some argue it is always a good time to invest in value companies, we see ample evidence of an inflection point now in terms of value swinging back in favour."
In the face of strong investment headwinds, Murray was confident that record low global interest rates, low growth and slow earnings growth had driven investors to defensive stock positions, now to be called ‘expensive defensives'.
"Australia has among the most expensive defensive stock ‘darlings' in the world, with potentially a lot more downside in those stocks to come," he said.
"Investors may simply exit these largely expensive defensive stocks and we believe the swing back to value is very much on the cards."
AUTHOR
Hope William-Smith
Recommended for you
The alternative investment manager has signalled its intentions to repackage an existing fund into a second private equity vehicle, targeting both listed and unlisted opportunities.
The acquisition of Mason Stevens by Adamantem Capital has reached completion, as the wealth platform looks to increase investment into its services for Australian wealth practices.
Platinum Asset Management and VanEck have both announced name changes to multiple of their ETFs to clarify their complexity.
Active ETFs are gaining traction in Asia-Pacific as wealth managers seek to blend the low-cost fees of passive with active management.
