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Is There Any Merit In Value Investing?

Performance and valuation of value vs. quality/growth is extreme. As is investor positioning.

• The value of quality strategies is in the 99th percentile
• The valuation gap between the most expensive and cheapest stocks in the market is approaching the extreme ‘tech boom’ levels of around 2001
• Mean reversion is at a 30-year low. This means that the winners keep winning and the losers keep losing, irrespective of valuation
• Money flows to ‘winning funds’ have also played a major part in this phenomenon
• Many market participants have never seen value outperform during their careers and this could be part of the current problem

But in recent weeks, value stocks have bounced back strongly and this looks set to continue. We examine the factors that have prompted this huge turn around and discuss why now is the time to buy value.
Recorded Nov 12 2019 35 mins
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Presented by
David Keir and Graham Campbell
Presentation preview: Is There Any Merit In Value Investing?

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  • Growth Bubble - Is It 2000 All Over Again? Recorded: Feb 11 2020 25 mins
    David Keir and Graham Campbell
    "We have spoken at length over the past 12 months on valuation anomalies, where share prices appeared to diverge from the underlying prospects for a business.  We highlighted the ratings of the so-called quality shares or the “bond proxies” which appeared at odds with company fundamentals.  The other major anomaly, in our view has been the outperformance of the US market pre-dominantly led by the FAANG shares – Facebook, Amazon, Apple, Netflix and Google.  The scale of relative outperformance has reached levels that appear to us as being within ‘bubble territory’.
     
    It is noteworthy that the bubble is being inflated by the largest shares in the biggest and most liquid stock market in the world.  We have seen this movie before, and it didn’t end well.  
     
    The fund, which is made up of well-known global leading businesses, remains very cheap – indeed we consider many of our holdings to be materially undervalued.  The underlying portfolio trades on 11.3X Year 1 PER and yields 4.8%.  The low valuation combined with underlying dividend growth on a high starting yield should deliver good performance over time."
  • TB Saracen UK Income Fund: Light At The End Of The Tunnel Recorded: Jan 22 2020 33 mins
    Scott McKenzie & David Clark
    The UK Equity Income sector has been the foundation of many UK investor portfolios for many years and has hosted a number of our most celebrated fund managers.

    However, the traditional approach to generating income from a UK equity portfolio has increasingly come under threat with a number of the large income-generating sectors becoming ex-growth.

    Too often UK income investors find themselves reliant on a small number of high yielding businesses whose best days are behind them and where dividend payments look fragile.

    All of this has come during a time when investors have prized growth over value and UK equities have been shunned in the light of the Brexit chaos.

    Post the recent election the political outlook has become more stable and the path to Brexit should become clearer. Is there now light at the end of the tunnel ?

    When we launched the TB Saracen UK Income fund in April 2015 we were determined to take a different approach in the light of these challenges.

    We strongly believe that valuations matter and that equity income funds should provide investors with a high and growing income.

    In this webcast we review the performance of the TB Saracen UK Income fund and outline why we feel the Fund is well positioned to meet the needs of income investors.

    Some of the key themes we will address include:

    - Why value strategies are still relevant in a changing world
    - The importance of a focussed, ‘multicap’ approach
    - The risks to UK dividends going forward

    Presented by :
    Scott McKenzie, Co-Manager , TB Saracen UK Income Fund
    David Clark, Co-Manager , TB Saracen UK Income Fund
    Ellie Sluys , Communications Manager, Saracen Fund Managers
  • Is There Any Merit In Value Investing? Recorded: Nov 12 2019 35 mins
    David Keir and Graham Campbell
    Performance and valuation of value vs. quality/growth is extreme. As is investor positioning.

    • The value of quality strategies is in the 99th percentile
    • The valuation gap between the most expensive and cheapest stocks in the market is approaching the extreme ‘tech boom’ levels of around 2001
    • Mean reversion is at a 30-year low. This means that the winners keep winning and the losers keep losing, irrespective of valuation
    • Money flows to ‘winning funds’ have also played a major part in this phenomenon
    • Many market participants have never seen value outperform during their careers and this could be part of the current problem

    But in recent weeks, value stocks have bounced back strongly and this looks set to continue. We examine the factors that have prompted this huge turn around and discuss why now is the time to buy value.
  • TB Saracen UK Alpha Fund...Opportunity Knocks Recorded: Nov 6 2019 36 mins
    Scott McKenzie and David Clark, Co-Fund Managers
    As a result of the Brexit chaos, the UK equity market has become a pariah in the eyes of both domestic and international investors. A significant valuation gap is now emerging, particularly in UK-centric businesses. All of this has come at a time when investors globally have continued to covet growth over value and quality over cyclicality. Despite these ‘new paradigms’, we believe that valuation still matters.
    In this webcast we shall introduce the TB Saracen UK Alpha fund to a wider audience and outline why we feel the Fund is well placed to benefit from any changes to the current consensus . In an era where liquidity issues are becoming more and more relevant, we see the small fund size and flexible mandate as important differentiators for UK Alpha.
    Some of the key themes we will address include:
    - The extreme valuation opportunities now emerging in UK shares
    - The importance of a flexible and open approach to stock selection
    - The benefits of a focussed, ‘multicap’ portfolio with high active share
  • "Value"ation Must Matter... Recorded: Jul 10 2019 42 mins
    Graham Campbell and David Keir
    Graham Campbell and David Keir, managers of TB Saracen Global Income & Growth Fund, discuss the fund's current value tilt.
  • TB Saracen UK Income Fund: Value in a Changing World Recorded: May 28 2019 35 mins
    Scott McKenzie
    For decades the UK Equity Income sector has been the foundation of many UK investor portfolios and has hosted a number of our most celebrated fund managers.
    However, the traditional approach to generating income from a UK equity portfolio has increasingly come under threat with a number of the large income-generating sectors becoming ex-growth.
    Too often UK income investors find themselves reliant on a small number of high yielding businesses whose best days are behind them and where dividend payments look fragile.
    All of this has come at a time when investors have prized growth over value and are shunning UK equities in the light of the chaos that is Brexit.

    When we launched the TB Saracen UK Income fund in April 2015 we were determined to take a different approach in the light of such challenges.
    We believe that valuation still matters and that equity income funds should provide investors with a high and growing income.

    In this webcast we shall introduce the TB Saracen UK Income fund to a wider audience and outline why we feel the Fund is well positioned to meet the needs of income investors.

    Some of the key themes we will address include:
    - The outlook for UK dividend growth
    - Why value strategies are still relevant in a changing world
    - The importance of a focussed, ‘multicap’ approach

    Presented by :
    Scott McKenzie, Fund Manager , TB Saracen UK Income Fund
    Ellie Sluys , Communications Manager, Saracen Fund Managers
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  • Title: Is There Any Merit In Value Investing?
  • Live at: Nov 12 2019 10:00 am
  • Presented by: David Keir and Graham Campbell
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