Arlingclose hosted Schroders’ Ben Arnold, CFA to discuss how value investing strategies are holding up during the pandemic. Value investing has long been the investment strategy at Schroders, taking a highly focused assessment of a company’s balance sheet and assessing the micro aspects of the company performance, rather than over-indulging on the macro forces at play in the market. By lending a bias to the intrinsic value that the financial analysis provides, Schroders assess the investment decision on whether the trade would present value by trading at a discount to their assessment. As Ben highlights in the webinar, value stocks have actually fallen more than growth stocks, including some of the cyclical stocks Schroders hold, however Ben emphasises the short term view of various market participants based on comparatively similar reactions to stocks in the global financial crisis.
The webinar gives an insight into how Schroders has made these decisions during the coronavirus crisis so far and how they have reacted to sector disparities. When market volatility increases, there is often an increase in the opportunities available to a value investor. Ben outlined some of the key differences from the global financial crisis and how the underlying strategies employed by Schroders will assist in income generation. The UK has had a relatively slow recovery so far compared to US stocks, as Ben outlines, due to the larger tech sector in the US.