Relocating Value

An Unwarranted Demise. Value investors in the U.S. extol the virtues of patience and resolve as their underperformance reaches two decades. For those attentive to the changing world around them, the tail told for the demise of value investing is incoherent with the global reality. Value investing is thriving in the regions where one would expect it: those with high fixed investments. China and other countries that are the goods export engine of the world delivered impressive returns for value investors over the last decade. This outcome is logical because countries that focus on services (e.g., the U.S.) are increasingly less fixed capital intensive and thus deliver a decreasing value factor exposure. The international value factor is alive and well. As the global economy evolves, so should investors.