Dispatches from the asset owner front line: NOBODY is bored with debating Value vs Growth

When I speak with the asset owner advisory board for the upcoming European Pensions/European Investment Roundtable I never suggest we debate value versus growth. And yet, it often rears its head, as a key debate within institutions.

For several, decades the leadership between value and growth strategies seesawed, but for each of the last dozen years, growth has prevailed. 

Its enduring and now sizable cumulative out performance has led some to conclude the contest is over; seeking growth stocks is a better strategy than ferreting out undervalued securities. 

Others insist the wave may be longer - but it is still a wave. Indeed, they think 2021 is the moment when value stocks will return to a leadership role. 

Amid this debate, some insist the game has changed in fundamental ways, raising questions about the traditional categories. 

When Benjamin Graham and David Dobb initially promulgated ideas about “value,” they were focused on balance sheet items, like plant and equipment. 

But today value is often in intangible intellectual property and network effects.

And others say the dichotomy between growth and value was always false: Some stocks are value stocks because they have strong growth potential that has not yet been recognised by the market. 

The growth vs value horse race will be handicapped – and debated at Institutional Investor’s European Pensions/European Investment Roundtable event, September 29 to October 1 2021, in Copenhagen.