The renaissance started more than a year ago, but the so-called value factor’s powerful rise in 2022 has reinforced belief that this is now a durable shift in market conditions.
“We survived the worst decade for value in history and now we’re enjoying the fruits of the rebound,” Rob Arnott, founder and chair of Research Affiliates, a consultancy, said. “This is a giant mispricing,” AQR founder Cliff Asness said. “I believe that the ridiculous spreads that we’re seeing mean that value is going to make a lot of money in the next three-plus years.”
And a shift in sentiment is starting to be borne out in exchange-traded fund flows among American investors. Growth-focused ETFs listed in the United States have registered net outflows of US$2 billion in the first four months of 2022, partially reversing the positive inflows of US$38.2 billion over the whole of last year, according to data from State Street Corp.Meanwhile U.S.-listed value ETFs have gathered net inflows of US$37.6 billion in the first four months of the year, following US$60.
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