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Investment insights

Will growth stocks beat value stocks forever?

Markets move up and down and investment styles move in and out of favour. With value investing being on the wrong side of the trend for around 12 years, investors are starting to question if value is off the runway for good. But is it?

The interesting setup for investors today is that the valuation gap between value and growth shares is close to record highs. This is at a time when we are close to entering a post-bear market phase, where value performs unusually well. Looking back over time, value has outperformed growth by a large amount after previous down markets – with average outperformance of 30-50% over one to three years. Historically, Orbis’ investment approach has tended to keep pace with growth markets but has benefited from a value tailwind.

Watch this 20-minute presentation by Graeme Shaw, from our offshore partner Orbis, delivered to financial advisers at a virtual event in Australia. He explains why it would be dangerous to assume the growth cycle will last forever.

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