Protracted poor performance of certain value formulations has provoked intense but muddled discussion about the viability of value investing. We apply a systematic lens to clarify the fundamental and behavioral drivers of value’s performance and to offer coherent perspective on the outlook. We consider nuance that is often glossed over in prevalent narratives, including the multifaceted and evolving nature of value concepts and investing approaches.
Value Revisited Series
The underperformance of value has become one of the most prevalent narratives in investing, but conventional accounts are oversimplified. Read our three-part series!
In the first installment in a three-part series, we present a richer picture, documenting salient patterns in returns to value and analyzing the drivers of its performance.Read More
In the second installment of the three-part series, Value Revisited, Acadian’s Approach to Value Investing, we touch on the following points:
Although value is widely discussed as if it were a one-dimensional and well-defined concept, it is implemented in myriad ways that generate materially different investment outcomes. Acadian’s approach to value investing reflects three key principles: 1) the value premium arises from investors’ behavioral mistakes, 2) value should be implemented within a multifactor process, and 3) value implementations should be nuanced and evolving. While we believe that refined approaches will improve long-term investment outcomes relative to rudimentary implementations, investors should expect them to episodically underperform.Read More
In the conclusion of our three-part series on value, we assess the outlook. We see no reason to abandon value as a long-term component of a multi-factor investing approach. Tactically, we advocate maintaining a value allocation in light of the market’s current “one-factor bet on growth.”Read More
Reach out to us to listen to the full webinar on the viability of value investing! Using a systematic lens, we will:
• Clarify the fundamental and behavioral drivers of value’s performance
• Offer a coherent perspective on the outlook for value
• Highlight the multifaceted and evolving nature of value concepts and investing approaches