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Where's the value in European equities?
60 second video: James Sym expects the value style to start outperforming growth later this year, and there is one unloved sector in particular he singles out.
Value versus growth has been the key debate in European equities this cycle.
Of course, growth has really been the pre-eminent style in this world of quantitative easing and low interest rates. Logically, however, I would expect that to fade in the second half of 2019.
The reason for that is we are starting at such an extreme level. I can now say that value has never been cheaper relative to growth. This includes during the TMT/dotcom bubble which burst in 2000.
With this in mind I favour sectors such as financials, but also smaller ones such as the oil services sector, where I think there is a potentially really interesting investment opportunity at the moment. It is very unloved and very depressed and we expect to see a recovery. As we expect growth to fade in the second half of 2019, this is an area I am focusing on.