Portfolio Manager Sam Peters, CFA, explains why despite value stock outperformance in 2022, the market is still in the early stages of a value leadership cycle:
- Despite growth valuations falling by twice as much as value in 2022, the relative value of value remains well above historic averages.
- Current valuation spreads are not much above average historic levels, further proof that fear of a recession is not yet priced into the markets.
- Opportunities arise during risk events as good stocks are thrown out with the bad, and we rely on our valuation discipline to find attractive stocks when no one wants them.
Author:
Sam Peters, CFA, Portfolio Manager, ClearBridge Investments