RWC Explains: What is value investing in today's market environment?

Hardeep  Tawakley
clock • 1 min read

Industry Voice: Ian Lance and Nick Purves discuss how value investing has changed in years gone by and why the market is at a turning point today when it comes to identifying value stocks

For Ian Lance and Nick Purves, managers of the TM RWC UK Equity Income Fund, the tug of war between value and growth that is being observed in the market today is something they have both experienced several times before in their 25-year plus careers, and explored on a wider scale when delving further back into history.

In the 1960s a new age of disruption saw investors ditch value investing for high-growth stocks such as Xerox, Polaroid and Eastman Kodak - institutional darlings that were part of the ‘Nifty fifty' range. Similarly, in the 1990s, value fell behind as investors sought growth in TMT stocks including Dell, Microsoft, Cisco and Intel. Dubbed the ‘four horsemen', these stocks accounted for 55% of NASDAQ's 1999 gains.

This stock performance is eerily similar to core market disruptors such as FANGMAN - Facebook, Apple, Netflix, Google, Microsoft, Amazon and Nvidia - which in 2017 represented almost a quarter of the Russell 1000's overall gains.

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, and why they believe the market is at a turning point today.

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