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.
