Our mission: the Brandes Institute investigates potential opportunities arising from the influence of behavioral and structural factors on global investing.
InvestorLit Research: Stocks vs. Bonds
Bruce Grantier, founder of InvestorLit (www.investorlit.com), focuses on the allocation between stocks and bonds in this review. With investors at what he describes as a generational juncture, the overwhelming evidence now favors stocks over bonds. Please click on the link above to read the full article. [RESEARCH ABSTRACT]
Value vs. Glamour: Emerging Markets
According to the International Monetary Fund, emerging markets now represent more than a third of global GDP—and are expected to grow at a faster rate than advanced economies.* With such explosive growth, investors often assume that an investment strategy focused on growth would yield better results. Yet, the results from the Brandes Institute’s Value vs. Glamour: A Global Phenomenon study show strong evidence of a value premium in developing countries. This study shows that value stocks in emerging markets have:
• Outperformed glamour stocks over the long term
• Experienced similar price volatility as glamour stocks
• Participated more in positive markets than glamour stocks
• Fared better during down markets than glamour stocks
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Why Has Value Underperformed Recently?
In this video, Bob Schmidt, Manager of the Brandes Institute, discusses why value stocks have underperformed in certain markets with Managing Director of Investments, Ken Little.
This video explores:
• How investor experience over the last five years has led some to seek out lower volatility products—often paying up for perceived safety
• Attractive valuation gaps in today’s market
• Compelling opportunities in overlooked and under-researched small- and mid- cap emerging market companies |
[click here to view transcript]
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Conventional Investing in a Complex World
In the wake of market volatility, many investors may feel a desire to change their approach and be more "nimble" or "opportunistic" in their pursuit of investment goals. In this paper, Robert Maynard, Chief Investment Officer for the Public Employee Retirement System of Idaho and Brandes Institute Advisory Board member, cautions investors who are thinking about abandoning traditional investment plans. He advocates policies that are simple, transparent, and focused rather than adopting increasingly popular "alternative" tactics such as illiquid instruments and vehicles, leverage, and complex, opaque investment strategies.
This article has been published in The Journal of Investing© and is available online at www.iijournals.com.
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Other Recent Research Projects:
Value vs. Glamour: A Study of the Indices
By examining returns for U.S. stocks from 1968-2012 and stocks outside of the United States from 1980-2012, the Brandes Institute’s Value vs. Glamour: A Global Phenomenon study reveals a consistent value premium across valuation metrics, geography and market capitalizations.
But what about commonly used benchmarks? Would a comparison between Value and Growth indices yield similar results?
Now updated through December 2012, this study examines large- and small-cap value and growth indices around the globe and presents evidence of a value premium within common benchmarks over the long term.
Value vs. Glamour: A Global Phenomenon
In previous versions of our Value vs. Glamour study we have explored the historical performance of stocks based on their fundamental characteristics and quantified a value premium. Expanding on the work of noted academics, we extended the scope of their research to determine if the value premium was consistent across global markets. In this update, we expand our study through 2012 to include the recent worldwide economic downturn. We also examine if value investing has worked in emerging markets over the long term. [RESEARCH ABSTRACT]
Click
here to view a list of all Brandes Institute publications
* IMF as of 10/1/2012, using nominal GDP. There is no assurance that a forecast will be accurate. Because of the many variables involved, an investor should not rely on forecasts without realizing their limitations.
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