Can value investing be sustainable?

2023-01-25

Value investing is an investment philosophy whereby the investor buys assets that they believe to be undervalued by the market and thus have the potential to generate returns.Over the last 12 months there has been a shift from growth to value: Surging inflation and commodity prices have been hugely beneficial for legacy companies in the oil and gas, and mining sectors as they have been able to take advantage of the global energy crisis and the switching on of demand post-Covid. An environment of...

Value investing is an investment philosophy whereby the investor buys assets that they believe to be undervalued by the market and thus have the potential to generate returns.

Over the last 12 months there has been a shift from growth to value: Surging inflation and commodity prices have been hugely beneficial for legacy companies in the oil and gas, and mining sectors as they have been able to take advantage of the global energy crisis and the switching on of demand post-Covid. An environment of rising interest rates is also helping value stocks to appear more valuable, as growth companies tend to have longer-term cash flow horizons; hence their valuations are affected more by rising rates.

So, with the increasing focus on sustainability can one be sustainable and a value investor at the same time?

Joining Ima Jackson-Obot, deputy features editor at FTAdviser, to discuss the topic are Roberta Barr, head of value team ESG - fund manager at Schroders, and Stuart Clark, WealthSelect portfolio manager at Quilter Investors.

The FTAdviser podcast is the podcast for financial advisers, brought to you by FTAdviser. Each week, FTAdviser is joined by guests from the industry to discuss the week in news and pressing industry issues.

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