Pzena

Owning the largest stocks has historically been a recipe for underperformance over every period, according to value house Pzena, but the madness of benchmark construction means some investors have few choices but to.

Rising interest rates and elevated stock multiples have brought down the equity risk premium and created a highly advantageous environment for value investors, according to Pzena Investment Management.

Teams from Pzena and Invesco scored highly against the Northern Trust-backed Essentia Analytics’ Behavioural Alpha Benchmark, a system designed to differentiate between luck and true investment nous.

Value investing is a lonely road, especially for those practitioners who are looking for real deep value rather than small arbitrages. The stocks they buy are very unloved, and they can stay that way for some time, while everyone else in the market thinks they are nuts.

A punishing, indiscriminate sell-off has left opportunities lying on the floor. After a 13-year “anti-value phase”, the style is coming back into style.

Investors are focusing too heavily on the transition to renewables and aren’t seeing the catastrophic implications of a short fall in oil supply, according to Pzena Investment Management. In recent times, a number of institutional investors have made waves by announcing sweeping divestments from fossil fuels like oil and thermal coal. But investors are pricing…