SHANE WATKINS: Upside abounds in the great rotation from growth to value
Joe Biden’s victory in the US and coronavirus vaccine prospects are reversing powerful trends towards developed markets
Returns on the JSE have been abysmal. Over the past five years less than 25% of the companies listed on the JSE have generated positive returns. Contributing factors have been a poor SA economy, outright corporate fraud and lesser corporate malfeasance. Management missteps in offshore expansions have been value destructive.
But there was another reason, unrelated to SA and SA company management: a global move out of emerging markets and into the developed markets, mainly the US. A big driver of this flow has been swopping value stocks for growth stocks. The JSE, of course, is an emerging market, populated largely with value-type companies...
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