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Holly LaFon
Holly LaFon
Articles (9854)  | Author's Website |

GMO’s 7-Year Asset Class Forecasts: Gap Widens Between Value and Growth

Jeremy Grantham's firm predicts best outcome for emerging value

June 20, 2019 | About:

GMO, an investment firm co-founded by Jeremy Grantham (Trades, Portfolio), released its seven-year forecast for equity return classes this week.

“A challenging May for many asset classes resulted in significantly increased forecasts, though equities outside the U.S. continue to offer more favorable risk premiums,” said Catherine LeGraw from GMO’s Asset Allocation team.

“The dispersion within equities is particularly interesting as the valuation gap between U.S. and international equities is closest to the widest it has ever been, and we are also seeing wide spreads between value and growth. We have not seen value trade so cheaply on a broad level across equity markets since the 2000s,” LeGraw continued.

“We continue to favor emerging markets equities, particularly emerging market value, and see some appeal in international value stocks. In the U.S., small-cap value is a pocket that has become quite attractive to us.”

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

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