The rotation towards value is a key theme of our 2021 investment outlook. As the US economy moves towards reopening and a return to normalcy, we expect an overly accommodative Federal Reserve (Fed) to let the economy ‘run hot’ in the near to medium term, meaning reflation and a steeper yield curve.
With a ‘V-shaped’ recovery underway, such conditions – combined with still excessive growth vs. value valuations – we believe enable an optimal setup for US value to outperform beyond its initial move last September. Beyond that, US value offers a compelling opportunity to sustain medium- to long-term performance relative to both the US and global markets, as it provides a unique combination of structural growth, quality, ESG improvement, stability, defensiveness, and relative valuation support. Virtually all other segments of the market provide only one or two of these features, but US value has them all.
You can now read the full whitepaper at the link below