07-04-2022 · 月次アウトルック

The Value winter is thawing

The renaissance in Value stocks is set to continue, partly due to the climate transition, says multi-asset investor Colin Graham.

    執筆者

  • Colin Graham - Head of Multi-Asset Strategies

    Colin Graham

    Head of Multi-Asset Strategies

The Value winter is thawing

He says the move away from growth stocks that began once the world started to get Covid-19 under control is backed by rising interest rates and the attraction of the lower carbon footprints of many value-orientated companies.

Value investing is the practice of picking stocks whose market values do not reflect the company’s true potential, offering upside in the share price. More expensive growth stocks that had dominated since the global financial crisis left investors looking for ‘sure things’ for over a decade – but that winter for value is now thawing.

“The growth style is undefined from a factor perspective, whereas value has a clear approach,” says Graham, senior portfolio manager with the Robeco Sustainable Multi-Asset Solutions team. “The growth style is a mixture of earnings quality/predictability and business model momentum for those companies with potentially super-high profits that are on their way to market dominance.”

“Some companies will succeed; we know the household names. However, there are many that will fail as their business model is exposed, and the ‘cheap money’ runs out. Do you remember Napster, Boo, Broadcast, Netscape, Bear Stearns, Pebble, etc.?”

Let the buyer beware

That’s not to say that the value style is without its own potential pitfalls, and as the old saying of ‘caveat emptor’ warns – let the buyer beware, he says.

“The most obvious downside of value investing is the ‘value trap’ where companies don’t innovate their way out of a ‘dying’ industry, or looking through a sustainable lens, those companies left with stranded assets,” he says. “There are many historical and current examples of companies and industries we can refer to; coal, tobacco, camera film, etc.”

“We can observe that the sectors and industries within the value style change – tech and health care make up 20% of many value funds today. We are strong believers in active management which can help avoid and mitigate these pitfalls.”

Rotation away from growth

“The data shows that the rotation away from growth began in Q3 2020, so these are not recent observations. Financials started to make a comeback once the US Federal Reserve stopped the post-Covid QE and investors realized that the fiscal stimulus would require higher rates as economies reopened and labor markets recovered towards full employment.”

“In a nutshell, yield curves began to steepen and then flatten towards the end of 2021. This created a catch-up for part of the value universe, although by the end of 2021, the growth and value styles were performing in line.”

After a stock market wobble in early 2022 on high inflation fears, the value rally saw another resurgence when both the US Federal Reserve and the Bank of England raised rates to combat spiraling prices – and then Russia invaded Ukraine.

クレジットに関する最新の「インサイト」を読む

Rarely does leadership change

Graham says this means the value rally looks like it’s here to stay, a sentiment recently echoed by Robeco’s value investors in the US, Asia and Europe.

“Very rarely in bull markets does the leadership change,” he says. “Sustained underperformance of the bull market champions could signal tougher times ahead for equity market performance.”

“We note that the value leadership baton was passed to the mining and energy sectors as the economic recovery remained supercharged and supply constraints became tighter after Russia invaded Ukraine.”

No ‘safe havens’

“Multi-asset investors use ‘safe haven’ assets to dampen volatility in fund performance. However, from our vantage point in this episode, government bonds have failed to provide this diversification. This has meant that equity and bond prices have moved in the same direction – namely down.”

“The US dollar did not see flows from investors seeking safety; indeed the euro rallied as the ECB continued its hawkish tone and its alignment with Fed tightening. As the war in Ukraine escalated, the US dollar rallied, and investors questioned the alignment between central banks.”

“The ECB and the Bank of Japan are less able to raise rates, while the US has begun a tightening policy by raising rates and signaling that more is yet to come.”

Lower environmental exposures

Now, the rally is being given a boost by the need to combat climate change and achieve net-zero emissions by 2050.

“The value winter is thawing, and we are finding the stock-picking universe to be different to those of previous cycles, with investors finding IT and health care names eligible for investment within the value style,” Graham says.

“The recent leaders of the value style in the more conventional value sectors have environmental footprints that are 50% of their respective global equity benchmarks, and the style is still historically cheap.”

“At Robeco, we are committed to climate transition, and this includes the value style. The decarbonization of value allows us to fully capture the risk premium while significantly lowering our carbon footprints.”

Read the full monthly outlook here

重要事項

当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。 ご契約に際しては、必要に応じ専門家にご相談の上、最終的なご判断はお客様ご自身でなさるようお願い致します。 運用を行う資産の評価額は、組入有価証券等の価格、金融市場の相場や金利等の変動、及び組入有価証券の発行体の財務状況による信用力等の影響を受けて変動します。また、外貨建資産に投資する場合は為替変動の影響も受けます。運用によって生じた損益は、全て投資家の皆様に帰属します。したがって投資元本や一定の運用成果が保証されているものではなく、投資元本を上回る損失を被ることがあります。弊社が行う金融商品取引業に係る手数料または報酬は、締結される契約の種類や契約資産額により異なるため、当資料において記載せず別途ご提示させて頂く場合があります。具体的な手数料または報酬の金額・計算方法につきましては弊社担当者へお問合せください。 当資料及び記載されている情報、商品に関する権利は弊社に帰属します。したがって、弊社の書面による同意なくしてその全部もしくは一部を複製またはその他の方法で配布することはご遠慮ください。 商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号 加入協会: 一般社団法人 日本投資顧問業協会