Because markets historically move in cycles, with some asset classes having outperformed others one year and then underperforming them the next, diversification could help reduce the volatility of a portfolio’s returns.
We believe that after a decade of lackluster performance, the recent performance of value stocks (MSCI World Value) has been remarkable. It has also raised the question: Is it too late to tap into the potential of this style factor?
As value stocks have historically done well during periods of elevated interest rates, we believe now is an opportune time for investors to consider an allocation to this investing style.
Because markets historically move in cycles, with some asset classes having outperformed others one year and then underperforming them the next, diversification could help reduce the volatility of a portfolio’s returns.
