Value Manager Study

Clifford Value Manager Study

If Value investments take the lead will your Value Manager deliver?

Allocators who invest in value strategies would both want and expect their value manager to perform well in periods when value stocks lead the market. During the last several years, there appears to have been a shift among value managers and their style of investing. Because technology stocks (and growth stocks in general) have been so strong for a long time, it seems to us as though more value managers have shifted their focus from finding traditional undervalued equities to a “relative value” mindset, which relaxes valuation parameters in an effort to purchase more expensive “high quality” companies with better historical growth.

We think these investors may have followed short-term performance leadership and drifted away from traditional value investing principles. And the diversification benefits that investors seek with their value managers are often not met with the “relative value” approach.

In this study, we cover:

1. The violent “Value Periods” and “Tech Periods” that have defined markets over the last few
   years.
2. How Clifford Capital has performed relative to other value managers during the Value Periods.
   
   1. Clifford has delivered top tier returns during Value Periods
   2. This has resulted in a differentiated return stream that we think leads to better
      diversification.
3. While the Nasdaq 100 has outperformed value overall, it has had significant negative returns during Value Periods.
4. Tech Valuations are at historic highs.
   
   1. Is tech outperformance sustainable or do company valuations actually matter over
      time?