RWC Explains: When, and why, does value investing work?

clock • 1 min read

Partner Insight: Markets have observed a trend towards quality growth over the past decade driven by the fact many investors sought growth in a world of secular stagnation. This combined with monetary policy initiatives such as falling interest rates have allowed growth stocks to thrive.

Yet there are now signs that the regime that has existed since the financial crisis is changing, particularly with the onset of quantitative tightening and the normalising of interest rates in the US and UK.

"As and when the profit cycle peaks, we believe it might present an attractive entry point for the contrarian minded value investor," explains Ian Lance, manager of the TM RWC UK Equity Income Fund. "This is because as the cycle peaks, companies that have been pulling out all the stops to keep earnings growth going often begin to struggle and have to re-set profit expectations. This can lead to a sharp price decline, sometimes to a change of management and strategy, and occasionally a financial restructuring as well."

In the video below, Lance and his co-manager on the fund Nick Purves discuss the intricacies of value investing and how it has evolved over the past decade.

More on Investment

Investment Week reveals winners of Fund Manager of the Year Awards 2025

Investment Week reveals winners of Fund Manager of the Year Awards 2025

Celebrating 30th anniversary of Investment Week

Katrina Lloyd
clock 20 June 2025 • 6 min read
Partner Insight: A full spectrum of 'sustainability focus' labelled funds

Partner Insight: A full spectrum of 'sustainability focus' labelled funds

Piers Hillier and Ed Venner, RLAM
clock 20 June 2025 • 4 min read
Charles Schwab UK's Richard Flynn: Young UK investors leading thematic investing charge

Charles Schwab UK's Richard Flynn: Young UK investors leading thematic investing charge

At a 'tipping point'

Richard Flynn
clock 17 June 2025 • 3 min read
Trustpilot