Markets took a downward turn in October as the impact of the global monetary tightening cycle, excessive valuations within some asset classes, political uncertainty and issues across emerging market currencies turned sentiment sour. However, we believe this was a sensible correction, not the first leg down in a long-term bear market.
Many of today’s younger fund managers – for example those who started their careers in 2007 or later – have only known an environment in which growth equities have outperformed value equities. Indeed, many industry discussions at conferences we attend discuss the view that growth is the only way forward, particularly in the United States. Many analysts in particular are unable to fathom why anyone would adopt a value bias, in any circumstance!