“What the last several years have proven is that valuation polarization can last for longer than one imagines,” said Paul Markham, a fund manager at Newton Investment Management who’s sticking to his growth bets.
Exchange-traded funds in the U.S. tracking growth have drawn $3.4 billion of inflows this month, the strongest since at least 2013.
All the same, Jeanmaire at Columbia Threadneedle has taken advantage of trade concerns to snap up shares of cyclical names including DSV A/S, Linde Plc and Sika AG.
And though his fund’s quality growth style means he’s almost always underweight on financial stocks -- in Europe, they’re at a record low versus the benchmark -- the extreme underperformance has prompted him to dial back their bearish stance.
“If you include the fact that maybe some investors will be concerned about the cycle, we think we can get these companies a bit cheaper than say some purely defensive companies with yield sensitivities, which have literally gone absolutely parabolic,” he said.
--With assistance from Gina Martin Adams.
This article was provided by Bloomberg News.