Are Higher Interest Rates A Boon For Value?
What could the correlation between the value factor and interest rates mean in today’s high interest rate and high inflation environment?
The inconsistent relationship between value factor returns and changes in interest rates, strong in recent years but mixed historically, can be explained by the time-varying duration of a portfolio that is long cheap stocks and short expensive stocks.
What could the correlation between the value factor and interest rates mean in today’s high interest rate and high inflation environment?
Our research shows this may be a great opportunity for value investing, as growth stocks reprice downward.
Andrew Dyson offers investors a different outlook on the relationship between growth and value factors, a better perspective on the “Is Value Dead?” debate.