Value vs. Glamour: A Global Phenomenon

70 Pages Posted: 22 Dec 2015

Multiple version iconThere are 3 versions of this paper

Date Written: November 2012

Abstract

In previous versions of our Value vs. Glamour study we have explored the historical performance of stocks based on their fundamental characteristics and quantified a value premium. Results have shown that over the long term, unpopular “value” stocks, those that are associated with companies experiencing hard times, operating in mature industries or facing adverse circumstances have outperformed their more popular “glamour” counterparts — fast-growing companies, often from dynamic industries with a relatively high profile. Expanding on the work of noted academics, we extended the scope of their research to determine if the value premium was consistent across global markets. In this update from our 2010 work, we expand our study through 2012 to include the recent worldwide economic downturn in developed markets and examine if value investing has worked in emerging markets over the long term.

This paper does not attempt to resolve why the value premium is evident, or explain its persistence. Instead, it seeks to quantify the value premium and gauge its prevalence. By examining returns for U.S. stocks from 1968-2012 and stocks outside of the U.S. from 1980-2012, this study reveals a consistent value premium across:

• valuation metrics

• geography

• market capitalizations

Keywords: value stocks, glamour stocks, value investing, emerging markets, long term, value premium

JEL Classification: G10, G11, G14, G15, G20, G22, G23, G30

Suggested Citation

Institute, Brandes, Value vs. Glamour: A Global Phenomenon (November 2012). Brandes Institute Research Paper No. 2012-05. Available at SSRN: https://ssrn.com/abstract=2706293 or http://dx.doi.org/10.2139/ssrn.2706293

Brandes Institute (Contact Author)

Brandes Investment Partners ( email )

11988 El Camino Real, Suite 500
P.O. Box 919048
San Diego, CA 92191-9048
United States

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