Let’s Talk About Value

Let’s Talk About Value

We looked under the hood of three popular Large Cap Value Value funds to see exactly what investors are exposed to…

  • We looked at three Large Cap Value funds: Pzena Global Value, Barrow Hanley Global Value Equity and Acadian Global All Country Equity.
  • All funds provide high Value exposure, but different exposures to Growth, Volatility and Momentum.
  • All funds have very different exposures to industries and sectors.
  • This has a direct impact on fund performance.

Value investing is getting a lot of attention. Earlier this year, many thought the strategy was dead. But we expected the 2020 election to bring a large shift from Growth and Momentum stocks to Value stocks. That is exactly what happened. But what are Value investors actually getting? We looked at three Large Cap Value funds: Pzena Global Value, Barrow Hanley Global Value Equity and Acadian Global All Country Equity, to see what investors are exposed to. We found that the Large Cap Value funds have very different exposures to investment Styles, industries and even to different types of Value stocks.

Global Large Cap Value Funds: Sub-Factors Matter

The three funds were analyzed over the past two years compared to the MSCI World Index. We created a peer group of 230 Global Large Cap Value Funds using the Style Analytics Peer Insights™ tool. The yellow squares in Figure 1 show the Style Tilt™ for the Pzena fund across 16 sub-factors within the seven investment Styles. The shaded areas show the quartile ranges for the funds in the peer group. The zero-line represents benchmark (MSCI World) exposure, showing that all the funds in the peer group’s light blue shaded area provide above-benchmark exposure to Value.

Crypto Hedge Fund Three Arrows Blows Up, Others Could Follow

CryptoA few years ago, crypto hedge funds were all the rage. As cryptocurrencies rose in value, hundreds of hedge funds specializing in digital assets launched to try and capitalize on investor demand. Some of these funds recorded double-digit gains in 2020 and 2021 as cryptocurrencies surged in value. However, this year, cryptocurrencies have been under Read More

popular Value funds

The Pzena fund delivers outlier exposure to Value regardless of which sub-factor is used. It also delivers very low Growth, Quality and Momentum exposure compared to its peers. Its exposure to Smaller Cap stocks is consistent with its higher-than average Volatility and it has a strong exposure to deep Value.

Figure 2 shows the Acadian fund (blue circles) compared to the same peer group of 230 Global Large Cap Value funds. Acadian has a more measured exposure to all Styles, with less concentrated Value exposure (in the second quartile of Value measures). It provides high exposure to Quality on two sub-factors: Return-on-Equity and Low Gearing (Low Leverage) and provides high exposure to both short- and long-term Momentum. While the Acadian fund does provide exposure to Value stocks, it is a balanced Value fund.

popular Value funds

Read the full article here by Damian Handzy, Head of Research and Chief Commercial Officer, Style Analytics

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article Consumer Confidence Experiences Dip In December 2020
Next article Logica Capital November 2020 Commentary: Get Shorty

No posts to display