Equity Dispersion: Value Stocks Yet to Be Rewarded
19 Pages Posted: 10 Aug 2011
Date Written: January 1, 2011
The correlation of returns for various equity asset classes has been high. In addition, the range or "dispersion" of returns across asset classes - and across sectors within those asset classes - has been low. These factors have made it difficult for active managers to outperform. But dispersion of valuations remains relatively wide by historical standards, creating a fertile environment for value-based stock pickers. When return dispersion broadens or returns to more normal levels, these undervalued securities may outperform the broader market.
Keywords: Brandes, Brandes institute, value investing, equity asset classes
JEL Classification: G10, G11, G14, G12
Suggested Citation: Suggested Citation