Funds with a value bias outperformed both benchmarks and peers in 2022, according to data from Hargreaves Lansdown.
Emma Wall, head of investment analysis and research at Hargreaves Lansdown, said: “2022 was a tough year for global markets – with equities and bonds falling in unison as inflation soared, economic uncertainty prevailed and political leaders offered little respite. However, not all investments lost money in the tumult.
“After a near decade run of outperformance, the tide turned on growth-style investments and value came up trumps.
“Of the (HL) Wealth Shortlist fund managers, Ben Whitmore at Jupiter Asset Management was among the top performers, with two funds in the top five for 2022 returns.”
As Wall explained further, Whitmore’s value bias had been out-of-favour for a stretch as tech-heavy funds dominated the lockdown years, but as the year opened with concerns about the US economy, value investments began a rally, extended by the war in Ukraine as soaring commodities prices boosted oil and gas and mining stocks.
The top performing Wealth Shortlist fund of 2022 was Man GLG Japan CoreAlpha, a value-biased fund, invested in financials, consumer and industrial companies, which underwent a change in management in 2021.
It outperformed the FTSE Japan index - a market-capitalization weighted index representing the performance of large and mid-cap Japanese companies that are constituents of the FTSE All-World Index - by 22 per cent after years of underperformance, which Wall said, showed the importance of investing in a diverse range of styles as well as asset classes and geographies.
Nick Woods, head of fund research at Quilter Cheviot, said while he believed value would continue to perform well due to rising interest rates and elevated energy prices, he added there would also be a focus on quality at a time when global growth is grinding to a snail’s pace.
He added: “These past 12 months have been some of the most difficult for investors. Geopolitical and localised factors meant there were very few hiding places, and those assets that you previously relied on for diversification struggled mightily,” Wood said.
“However, wherever volatility rears its head, opportunity comes calling quickly afterward and it is important investors look back on years like 2022 and get their portfolios positioned for a changing environment in 2023.”
