Jason Williams, Director, Portfolio Manager / Analyst, Lazard Asset Management met with Julie Cooling, Founder & CEO, RIA Channel to discuss the key factors driving the growth to value rotation, and the importance of quality investing in the current market environment.
“Investors tend to under-appreciate how much equity markets have been fundamentally reshaped in the last decade,” says Williams on the enormous shift from traditional value sectors to growth sectors. On an international scale, global investors have also heavily favored U.S. equities and U.S. currencies. “I urge investors to ask themselves how exposed they are, and how truly diversified their portfolios are really,” says Williams.
The current market environment presents a new set of challenges many investors have not experienced since the 1970’s. Factors like persisting inflation, sky high valuations, rising interest rates, and global supply shortages are once again prompting investors to rethink their exposure to equity markets and position client portfolios towards high-quality companies with a pattern of sustainable growth.
Rather than evaluating stocks from a purely growth or value perspective, Williams encourages investors to think in terms of quality characteristics like financial productivity, growth, and length of competitive advantage period. Williams expects that the market outlook and length of the growth to value cycle centers around the long-term rate of inflation and the performance of the U.S. dollar.
Lazard Asset Management is a global investment manager with over $188B in AUM across a wide range of global, regional and country-specific strategies, spanning both traditional and alternative investments.
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