Industry Voice: Ian Lance and Nick Purves discuss how they define Value Investing
Having seen the rotation of growth and value stocks several times in their careers, fund managers Ian Lance and Nick Purves believe markets could be entering a similar point of change today. This notion is supported by the dispersion of valuations across the cheapest and most expensive stocks in UK, which has become much wider in recent years.
However, in line with the growth/value shift seen during other core periods in history, Lance notes the key to successful value investing is to be prepared for the turning point in markets ahead of when it occurs.
"Value investing has always felt pretty lonely, but surely that is the reason it works," says Purves. "And one of the key lessons we have learnt through our careers is that when the shift from growth to value happens, it can be sudden and violent. Positioning needs to be made in advance of that move. So the time to act, and focus on the value style of investing, is now."
In the video below, Lance and his co-manager on the fund Nick Purves discuss the intricacies of value investing within their new fund, the TM RWC UK Equity Income Fund, and how they focus specifically on ‘intrinsic' value in order to uncover the best stocks.