Why Value Now? | Mackenzie Investments

Why Value Now?

Why Value Now?

Portfolio Managers Jonathan Norwood and Richard Wong discuss the two-year turnaround of the Mackenzie Cundill Team.

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Why Value Now?

Richard: Now, more than any of the recent period is the time to look into value investing. Not only is the macro backdrop really perfect for value investing, with global growth, rising interest rates and also inflation coming back into the picture, but we’re also going into an environment where the hyper-growth momentum tech stocks, their business model is being scrutinized around the world right now, you know. Not just here but in Asia, in Europe as well.

We believe that their lofty valuations cannot be maintained given the risks. And we begin to see the beginning of the end of, really, their leadership in the markets.

Jonathan: You know, the interesting thing is, is that a lot of macro issues that have been headwinds for the value style, namely low interest rates and to some extent slow global economic growth have in fact become tailwinds for us.

And regulation is another, I think, headwind that we faced, and particularly in the financial services sector in the U.S., which is starting to become a tailwind. And certainly in the tech sector, the exact opposite is true. So they’re starting to face increased regulatory headwinds.

So, and to Richard’s point, we feel like we’re in the sweet spot right now.