POWERED BY MOMENTUM MEDIA
Long-term value investing still pays off
Investors should not give up on long-term value investing, even though it has been subject to recent cyclicality, according to State Street Global Advisors (SSGA).
Also, at this relatively low point in cycle, investors should broaden their definition of value in order to fully capture the value premium over the long term, the firm said.
Value investing underperformed its long-term average returns for eight years and following the Global Financial Crisis (GFC) when central banks in developed regions aimed to pursue aggressive monetary easing tactics to provide liquidity which, in turn, inflated asset prices.
However, the change of action by central banks, which are currently reducing their balance sheets and increasing rates, might have a positive effect on the value premium as steadily rising rates lead to lower growth stock valuations.
“With this in mind, rather than abandon the value theme until its performance improves, we believe that this is exactly the time to adhere firmly to the time-tested principles of value investing – and not to give into irrational exuberance,” SSGA said.
“Like any investment, value is subject to cyclicality. During down periods in the cycle, investors can improve their long-term prospects for success by being discerning as they continue to invest in value stocks.
“To that end, we believe that a robust and multi-dimensional approach to value is essential for investors who seek to reap the benefits of value investing over the longer term.”
Recommended for you
In this latest edition, Anna Shelley, CIO at AMP, shares the fund’s approach to current market conditions and where it continues to uncover key opportunities.
The mega fund has announced a $2.2 billion investment in a leading data centre platform, bringing its global real assets portfolio to nearly $60 billion.
In this latest edition, Australian Retirement Trust’s head of global real assets Michael Weaver explains the fund’s approach to finding new opportunities as it surpasses $300 billion in funds under management.
Fund managers remain hopeful for a Chinese revival story despite the “disappointing” stimulus package announced this week.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
