Future looks rosy for value stocks
Stronger economic growth as well as stable inflation and bond yields should support category
17 February 2021 - 16:49
We maintain a bullish outlook for global equities in general for 2021. However, we are switching our bias from a preference for quality and growth stocks to an increasingly optimistic outlook for value equities.
At a high level, growth stocks are companies with a high expected earnings growth rate. Value stocks are companies that are cheap relatively to the rest of the market. While valuations for all areas of the market look expensive relative to their own history, growth equities appear to have discounted a lot more good news and so there is scope for their value counterparts to play catch-up...
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