The right sort of value

hansen-jens

Jens Hansen

  • Managing Director, Chief Investment Officer — Global Equity Team
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petersen-klaus

Klaus Petersen

  • Managing Director, Senior Portfolio Manager
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Not all value strategies are created equal and the application of value takes many forms. Rather than using cheapness of a security as a primary metric, the Macquarie Global Equity team believes that focusing on high-quality businesses trading at attractive valuations can offer a more compelling method of value investing. This philosophy is explored in “The right sort of value.”

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The views expressed represent the investment team’s assessment of the market environment as of February 2021, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice.

Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

Diversification may not protect against market risk.

Value investing, in its traditional form, focuses on buying stocks that are trading at bargain prices based on fundamental analysis, then holding them until they become fully valued. With this approach, value investors typically select securities with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields.

International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.

The benchmark for the composite is the MSCI EAFE (Europe, Australasia, Far East) Index (net). The MSCI EAFE (Europe, Australasia, Far East) Index represents large-and mid-cap stocks across 21 developed markets, excluding the United States and Canada. The index covers approximately 85% of the free float-adjusted market capitalization in each country. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. For comparison purposes, the index is fully invested and includes the reinvestment of income. Index returns do not reflect management fees, transaction costs, or expenses. Indices are unmanaged, and one cannot invest directly in an index. Benchmark returns are not covered by the report of independent verifiers. Benchmark information contained herein has been obtained from third party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.

The MSCI EAFE (Europe, Australasia, Far East) Value Index represents small-cap stocks exhibiting overall value style across developed market countries around the world, excluding the United States and Canada. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.