Value investing

Value investors, did you check the price tag?

It will come as no surprise that ‘value’ investing has underperformed in recent years. A quick look at the top performers in the FTSE 100 index year to date confirms this: the top three performers are JD Sports, Aveva and London Stock Exchange.

All three are good companies that are growing earnings at double-digit rates; but all are on a high valuation (versus both the UK market and their own history) and would pay little in the form of a dividend.

- Laura Foll interview

Where can value investors find the best fund and trust bargains?

Value investing is set for a comeback in 2020, after a decade in the doldrums. While recession risk appears to have subsided, sentiment remains fragile and there is a solid argument for a shift to buying value.

“Value is already pricing in a downturn – and growth stocks trade close to all-time highs,” says Lee Wild, head of equity strategy at interactive investor.

Precisely timing the shift is impossible, though, and Wild concedes growth stocks may have further to climb if macro events such as trade talks and interest rate policies go their way.

ETF portfolio: slowing China hits returns

Our new global value exchange traded fund (ETF) portfolio has produced a negative return over the three months to the end of November. In total, the £8,000 portfolio was down to 0.87%, losing a total of £69 between 2 September and 2 December.

Time to switch from growth to value?

With stockmarket indices near all-time highs, capital growth has not been a problem over the last decade or so: investors have had a good ride. Quoted companies have found it cheap to borrow money, which has led to greater levels of capital expenditure and boosted profits, in turn encouraging more investors to buy shares and pulling prices up.

ETF portfolio: finding value in the world’s cheapest stockmarkets

Value is one of the few consistent predictors of investment returns, and when it comes to attempting to profit from value investing, there are plenty of ways to skin the proverbial cat.

Our new global value portfolio seeks to profit from the eight most undervalued single-country markets in the world, out of the 40 that are investable and accessible using ETFs.

Value investing: how to become a bargain-hunter investor

Value investing: how to become a bargain-hunter investor

The basis of value investing involves buying a stock for less than it is (or should be) worth and holding it until the market catches up and re-rates: “buy low, sell high”, as the cliché goes. But in recent years markets have behaved slightly differently, and the more rewarding method of investing has been to go for so-called growth stocks. These are companies that are highly valued in anticipation of future growth. “Buy high and sell even higher,” has instead been the mantra.

If value makes a comeback, these are the investment trusts to buy

One of the defining characteristics of the investment world since the financial crisis of 2008/09 has been the underperformance of value investing as a style. There has been much academic work suggesting that over the long term a value approach – in simple terms buying companies where the prices are cheap relative to fundamentals – usually pays off. But in the past 10 years this has emphatically not been the case.

Is value investing a broken model?

The concept of value investing is pretty straightforward. Value investors look for shares that are selling for less than they deem them to be really worth. The hope is that the market will eventually catch up, resulting in the ‘intrinsic value’ of a company and its market value converging, enabling investors to profit from the revalued share’s price increase.