08 April, 2022 | 2:56 pm

Portfolio manager Ian Lance recently recorded an update video for the Doceo investment trust platform, which we share below.

We have also recently published a number of charts on social media, highlighting the ongoing UK value investment opportunity, which we also share with you below with some brief commentary.

The UK value opportunity explained in eight charts

Chart 1

More than a decade of quantitative easing and zero interest rates has led to record high valuations in many assets, growth stocks in particular. With inflation now prompting higher interest rates…

Extraordinary monetary policy has fuelled an extraordinary surge in growth stocks

… we believe we may be in the foothills of a profound rotation away from growth stocks, and towards parts of the market that offer greater value.

Chart 2

More than a decade of quantitative easing has caused an epic bubble in long duration assets such as growth stocks. The valuation of US technology stocks, for example, easily surpasses what was seen at the peak of the dotcom bubble….

Technology valuations significantly exceed those seen at the peak of the dotcom bubble

…What happens when that bubble bursts?

Chart 3

Inflation is hitting multi-decade highs in many countries. The era of zero interest rates appears to be coming to an end…

UK inflation is at its highest level since 1992

…if you believe, like we do, that zero interest rates have triggered a disturbing bubble in growth stocks, what is going to happen when interest rates start to rise?

Chart 4

Inflation is hitting multi-decade highs in many economies…

US value stocks outperformed significantly during the last period of high inflation

…history has shown that value stocks do well in periods of high inflation.

Chart 5

High inflation imperils the era of zero interest rates. Many of the trends that have dominated global markets for more than a decade may be in the process of starting to reverse…

Higher interest rates tend to favour cyclical value sectors

…higher interest rates tend to favour cyclical value sectors such as financials, energy and industrials.

Chart 6

After more than a decade of growth stock dominance, many investors are concerned about the prospect of a sustained correction…

UK stocks trade at a significant discount to global and European peers

…very few regional stock markets look good value these days, but fortunately the UK is one of the few. It looks better value relative to other regions than it has for decades!

Chart 7

After years of under-performance, the UK stock market looks good value…

Deal activity has picked up more in the UK than in other markets

…and deal activity suggests that many corporates and private equity are beginning to take advantage.

Chart 8

More than a decade of zero interest rates has driven yield compression across nearly all asset classes…

The UK stock market continues to offer an attractive yield

…but this chart demonstrates that there is still a rare and attractive yield opportunity available in the UK stock market.

Think value investing? Think Temple Bar.

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