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Have growth and value fund pairs outperformed the market?

by Jennifer Hill from interactive investor, 23rd June 2022:

Last year we asked experts to name value and growth fund pairs to navigate the market rotation. The tactic has not yet paid off, but should investors stick with them?..

The sharp reversal in fortunes highlights the folly of pinning your colours to a single mast. But did our six value and growth pairs do as was intended – capturing the upside of the rotation and thereby protecting against the downside?

Given that the rout in growth stocks has far outstripped the rebound in value stocks, it comes as little surprise that all six pairs lost ground…

The best-performing pair was two UK equity income plays suggested by Charles Stanley analyst Adam Carruthers. Temple Bar, run by value investors Nick Purves and Ian Lance of RWC Partners, made a 3% gain after a torrid period of losses, and Finsbury Growth & Income run by seasoned growth investor Nick Train, was down 11.5%, holding up far better than many of the experts’ other growth picks…

David Winckler, Kingswood’s associate director of investment strategy, plumped for two small and medium UK companies funds that had been in its core portfolios since 2018…

Shore Financial Planning director Ben Yearsley paired Man GLG Japan CoreAlpha (11.2%) with Baillie Gifford Japan, delivering a collective return of -23.2%…

Sullivan at Tyndall also fell foul of the pounding received by staunch growth investor Baillie Gifford…

The next pair, value proposition Aberdeen Emerging Markets and growthier play JPMorgan Emerging Markets, showed the least divergence in performance with returns of -13.7% and -18.8%, respectively…

“Thereafter, beating the benchmark has been largely down to how much exposure you had to Russia, your bias to growth stocks and whether you were underweight China or not,” says James Carthew, head of investment trust research at QuotedData, who recommended the pair…

For global exposure, Lovett-Turner and Carthew both like Alliance Trust while Tyndall uses the LF Havelock Global Select and Schroder Global Equity funds as core global holdings.

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