27th August 2020
Style rotations, where investors switch one type of investment style for another, are nothing new. At some point during most investment cycles different styles – such as growth, quality and value – will outperform at different points as investors rotate in and out depending on their outlook.
Given the degree of volatility in markets, and the extreme nature of the quality/growth outperformance, we would expect in any recovery for there to be times when value – typically those companies which may go out of business given the degree of the contraction – will outperform. Similar periods occurred temporarily in Q2 2003 and Q2 2009 as markets rallied.
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