Asset Allocation Strategy
Value Versus Growth: How Durable is the rally in Value Stocks?
Mon 30th November, 2020

After a long period in the wilderness for the value style, the prospect of multiple effective vaccines reviving economic activity has seen a sharp rally in value stocks this month. In our weekly asset allocation view, we weigh up both sides of the value versus growth debate and outline the pieces falling into place for the revival to continue relatively strongly into 2021.

To examine the durability of the rally in value stocks we cover:

  • A short history of value versus growth investing
  • The trend of growth outperformance over value since 2007
  • The widened valuation gap
  • Why value stocks have struggled to grow in the past 10 years
  • The important inflection point for value stocks from an earnings perspective
  • Both sides of the value versus growth debate

    Disclaimer and disclosures

    Recommendation structure, definitions and the Financial Services Guide (“FSG”) can be found at www.wilsonsadvisory.com.au/disclosures.

    Disclaimer

    This document has been prepared by Wilsons Advisory and Stockbroking Limited (AFSL 238375, ABN 68 010 529 665) (“Wilsons”) and its authors without consultation with any third parties, nor is Wilsons authorised to provide any information or make any representation or warranty on behalf of such parties. Any opinions contained in this document are subject to change and do not necessarily reflect the views of Wilsons. This document has not been prepared or reviewed by Wilsons' Research Department and does not constitute investment research. Wilsons makes no representation or warranty, express or implied, as to the accuracy or completeness of the information and opinions contained therein, and no reliance should be placed on this document in making any investment decision. Any projections contained in this communication are estimates only. Such projections are subject to market influences and contingent upon matters outside the control of Wilsons and therefore may not be realised in the future. Past performance is not an indication of future performance.

    In preparing the information in this document Wilsons did not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any advice contained in this document is general advice only. Before making any investment decision, you should consider your own investment needs and objectives and should seek financial advice. You should consider the Product Disclosure Statement or prospectus in deciding whether to acquire a product. The Product Disclosure Statement or Prospectus is available through your financial adviser.

    Wilsons and Wilsons Corporate Finance Limited (ABN 65 057 547 323, AFSL 238 383) and their associates may have received and may continue to receive fees from any company or companies referred to in this document (the “Companies”) in relation to corporate advisory, underwriting or other professional investment services. The directors of Wilsons advise that at the date of this report they and their associates may have relevant interests in the securities of the Companies. Please see relevant Wilsons disclosures at www.wilsonsadvisory.com.au/disclosures.

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    Written by

    David Cassidy , Head of Investment Strategy

    David is one of Australia’s leading investment strategists.

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