Taking a top-down approach to US equities is the wrong way to approach value investing in the world's biggest economy says Ed Walczak, investment adviser to the Close Finsbury North American Equity fund.
Instead, investors need to start from the position of examining individual companies for particular strengths, then look at the share price in the market for any discounts to the estimated long-term value. Macroeconomics or currency forecasts add nothing to this process, Walczak says. That approach has resulted in a fund with a 20% cash holding and a strongly overweight position in financial stocks compared to the S&P benchmark average. Walczak says these positions may strike investors as odd, but to him and his team of analysts the “investible universe” of companies with enough quali...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes