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Equity insight - Value versus Growth

Is disruption overrated? Current capitalisations of large stocks are at odds with economic size. Is now the time for less spectacular businesses?
13 November 2020
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    Key takeaways:

    • Recent years have strikingly favoured growth at the expense of value. Market capitalisation has heavily concentrated into a few names which have "disrupted" economies by introducing e-commerce, smartphones, social media, internet search engines or electric cars. Investment returns have diverged strongly and value investors have typically remained on the sidelines.
    • We are now in a situation where expected growth rates of large stocks are impressive and capitalisations are at odds with economic size.
    • For investors, it may not appear to be the right time to chase winners; but can less spectacular businesses start to become more rewarding?