Polar Capital's Davis: Time to take control of style drift?

The past six months in European markets have been dominated by two factors: profit warnings in the more cyclical sectors and an aggressive derating of mid-cap growth stocks.

The post-eurozone crisis playbook of owning global growth stocks at any price is clearly being challenged by the current market environment. We do not see this as helpful for either very low-quality businesses or very expensive ones. Dependable growth stocks have been a one-way bet for much of the 21st century driven by the so-called ‘great moderation' in the 2000s and then the central bank reflation period of the 2010s. This has encouraged a gradual style drift from growth at a reasonable price to growth at any price, a drift that has worked in an era of scarce growth, low inflati...