Why the Future Now Looks Brighter for Value Investing

The extreme valuation dispersion between value and growth stocks stands near historic levels. Economic recovery and improving corporate earnings are likely to benefit cyclical and value areas of the market most. A coronavirus vaccine is key to unlocking short-term performance, but long term, inflation is required to deliver a more sustained rotation. The narrow leadership and increasingly bifurcated nature of markets has created many opportunities for uncertainty and mispricing to be exploited.