(Bloomberg) - Value investing has long been out of favor in US stocks and last quarter was no different, as an index of beaten-down shares badly trailed the broader market’s furious rally.
But it was also a time to shine for stock pickers focusing on downtrodden companies. Around 63% of active managers investing in cheap large-cap stocks outperformed their benchmarks in the second quarter, the best showing since the depths of the pandemic in 2020, data compiled by Jefferies show.
While most of the focus was on the megacap firms that led the stock-market rebound from its nadir in April, the money managers who knew where to look were able to uncover huge pockets of opportunity in value as well. Value fund managers swooped in on industrials firms, which rallied 11% last quarter — on par with with the S&P 500 — and stayed away from bond proxies like utilities, consumer staples and real estate, some of the worst performers in the Russell 1000 Value Index last quarter, Jefferies data show.
Natalia Kniazhevich
