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By Mathias TALMANT, Junior Portfolio Manager FARAD Investment Management S.A.
The globalisation and digitalisation of trades have resulted in significant economies of scale for growth labelled stocks (the New Economy) over the last decade. In contrast, value stocks (the Old Economy) fell out of fashion amid consistent underperformance, which sent investors to capitulation grounds. This phenomenon was amplified by reflation trades and the “work from home” fad, which have both exacerbated the valuation of a plethora of high duration stocks.
On the eve of MIFID II extension (August 2022) and the new EU taxonomy, asset managers hastened to launch strategies sporting the SFDR 8 or 9 stamp in order to collect funds from non-sustainability-savvy...
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