Templeton sees value stocks outside US
Templeton Global Growth Fund (TGG), an Australian listed investment company (LIC), has reported improved returns for the past year as at 30 June, with its portfolio delivering a gross return of 23.3 per cent and outperforming its benchmark by eight per cent, thanks to value opportunities found in non-US equities.
According to TGG, in late 2015 value investing started to rebound from the 20-year performance lows and there was a strong historical relationship between value investing and equities outside the US.
TGG’s portfolio manager, Peter Wilmhurst, said: “As contrarian value investors, we currently consider the best opportunities to be within overlooked non-US markets”.
“While US stocks have recently experienced their second-longest bull run in history in terms of duration, the US economic cycle looks vulnerable as post-election euphoria fades.”
At the same time, Europe was recovering from its double-dip recession, with improving fundamentals in the real economy and at the corporate level as well as growth forecasts being continuously revised upwards, unlike the US.
“The last time non-US stocks were this much of a bargain relative to US stocks, it preceded a rally that lasted six years and saw non-US equities significantly outperform their US peers,” Wilmhurst said.
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