Investec W&I's Summers on the outlook for quality growth companies

Hurt by recent underperformance

Quality growth has certainly underperformed cyclical growth over the short term and we think this will continue for some time, albeit not in a straight line.

We will always have a large element of quality growth in our portfolios - companies that can grow earnings, at least in line with inflation, over the long term almost regardless of economic conditions.  Such quality earnings undoubtedly come at a cost. And insofar as these companies are deemed proxies for government bonds, they can underperform on a relative basis when government bond yields rise and become relatively more attractive.   The key difference, of course, is that whereas conventional gilts do not provide inflation protection or growth, equities can. Furthermore, although w...