Why stockpickers are searching for growth over value

Equity fund managers are increasingly looking for growth over value when selecting stocks on European markets, according to Fitch Ratings.

Fitch argued stock selection processes are changing and investors are now placing greater emphasis on strategic analysis, favouring companies with high return on capital and strong competitive positioning rather than attractive valuations. Valuation was a key focus for stockpickers between 2001 and 2008, but is now secondary to sustainable growth and return on equity when investors are looking for entry and exit points, Fitch said. Stocks with these characteristics have typically performed better since 2009, the ratings agency added. Fitch said since the publication of its report late...