Value stocks have lagged behind the growth style for much of the past decade, but research by Trustnet suggests there are a number of global equity funds that have gone to the top of the sector when value is in favour. 
In a previous article, Trustnet revealed the UK equity funds that have jumped to the top of their sector in the months when the value style outperformed growth. Names such as VT Cape Wrath Focus, VT Teviot UK Smaller Companies, Schroder Recovery and JOHCM UK Equity Income appeared on the list.
In this article, we turn our attention to the IA Global sector, looking for funds that made top quintile returns in months when the MSCI World Value index outpaced the MSCI World Growth by more than 1.5 percentage points. We went back to the start of 2008 in this research and there are 24 months eligible for inclusion.
Several funds out of the 380 in the global equity sector have made top-quintile total returns in months when value has outperformed, although some do not have track records covering the entire period under consideration.
At the top of the list is the Luxembourg-domiciled JGF-Jupiter Global Value fund. Its UK share class was launched in November 2016, meaning it was active in six of the months we looked at in this study and was in the IA Global sector’s top quintile in each.
Performance of fund vs sector and index since launch
Source: FE Analytics, data as at 9 Mar 2021
Managed by Ben Whitmore and Dermot Murphy, the £298m fund has a clear focus on value investing and Whitmore is an experienced value manager, having run the Jupiter UK Special Situations fund since 2006.
Whitmore and Murphy also run the £211m Jupiter Global Value Equity fund, an onshore mirror strategy of JGF-Jupiter Global Value. It has a track record that covers four of the months when value outperformed and was top quintile in each.
Both funds have around 27 per cent of their portfolios allocated to the UK, with around the same in European stocks and 15 per cent each in Japan and the US. Top holdings for the strategies include BP, Standard Chartered and Volkswagen.
Since inception, JGF-Jupiter Global Value’s GBP share class has underperformed both the average IA Global fund and its MSCI AC World index benchmark, owing to the fact that value has lagged growth by a significant margin. However, its 8.4 per cent run in 2021 so far above the 0.3 per cent made by both the peer group and the index.
The table below shows all the funds that were in the IA Global sector’s top quintile in more than 40 per cent of the months when the value style was outperformed. We’ve taken out any with a track record that covers fewer than four of these months, leaving 40 funds in total.
Source: FinXL
Schroder Global Recovery is another well-known value member of the sector and it has been in the top quintile of peer group in 90 per cent of the months that value was leading the market (out of a track record covering 10 of these months).
It is managed by Nick Kirrage, Andrew Lyddon and Simon Alder, who are members of Schroders’ respected value investing team. This team also runs portfolios such as the UK-focused Schroder Recovery and Schroder Income funds.
Commenting at the end of 2020 after a rebound in value, the fund’s managers argued that the style has further to run: “Despite a strong fourth quarter, valuations of value versus growth are still near all-time lows and remain more extended than at the peak of the dotcom bubble in 2000.
“History suggests that investors in value funds stand to make stellar returns, in both absolute and relative terms, over the coming decade.”
Other well-known funds on the above list include M&G Global Dividend, which is headed up by Stuart Rhodes. While not a dedicated value manager, Rhodes avoids over-paying for a stock and the portfolio does end up with a tilt towards the value style.
Analysts at Square Mile Investment Consulting & Research said: “The portfolio is built with a core of solid, reliable dividend paying companies which are supplemented with more cyclically sensitive names and also those going through a strong growth phase. The combination of these should allow the fund to remain competitive across a range of market conditions.”
Also found on the above list are several sector-specialist funds such as Fidelity Global Financial Services, Denker Global Financial and Guinness Global Money Managers.
This is explained by the tendency for banks and other financial businesses to outperform during value rallies as their more-cyclical natures means they become attractive to investors.