Value stocks have outperformed the broad equity market over the long term, with periodic downcycles.²  After a recent severe downcycle, we believe that Value, properly defined, will continue to outperform.  Moreover, Value is particularly attractive currently, given very cheap starting valuations and improving support from fundamental dynamics.  We believe Value is on the cusp of a structural bull market, driven by a regime shift from “Low Nominals” (low growth, interest rates, and inflation) to a higher nominal growth, interest rates, and inflation environment. 

The Dynamic Value strategy seeks to provide a more dynamic and concentrated approach, compared with traditional Value investing.

1. The proper definition of Value is key.  Our multi-factor approach to identifying Value stocks results in a high active share portfolio, unlike passive Value index-replicating exchange traded funds (ETFs) which have a high overlap with broad market indices. 
2. Despite Value’s long-term outperformance, Value has historically experienced periodic downcycles, and there are times when Value will be more or less attractive compared with history.  The strategy is designed to dynamically increase/decrease exposure to Value stocks and sectors depending on the attractiveness of Value relative to Anti-Value at a given point in time.