The increasing likelihood of an inflationary environment, the hefty performance gap between growth and value stocks and a widespread style drift towards tech names from fund managers means shunning value funds is "a dangerous way to put all of your eggs in one basket," according to BMO GAM's Paul Green.
Green, who is a portfolio manager on the multi-manager team at the firm, said there are numerous signs that both retail and professional investors are "throwing in the towel when it comes to value funds" in the belief that "the only way you can make money is by buying what has worked in the past". LGIM's Onuekwusi: Diversification is the only free lunch investors will get He said: "The S&P 500 Growth and Value indices are showing their largest gap in performance for 25 years, while tech stocks account for 30% of the S&P 500 currently, which is a 20-year high. This even excludes Amazon...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
