Away from the headlines

We are not writing about Fed independence, a potential resignation of Jerome Powell, or EU tariffs this morning — not because these topics aren’t relevant, but because we don’t have any additional insights at this stage. This morning, European stock futures are pointing 0.6% lower, while the EU’s political leadership continues to struggle to negotiate a trade deal with the US before the August 1st deadline.

So instead, let’s take a step back and look at something we do understand better: the long-term cycles of Value vs. Growth investing.

The chart below tells the story. Over the past five decades, the relationship between Growth and Value has oscillated — sometimes dramatically. Value investing, which focuses on companies trading below their intrinsic worth, has historically outperformed over extended periods. But the 2010s, driven by near-zero rates and tech dominance, were a decade of Growth supremacy.

More recently, Value has begun to show signs of life again. As shown by the light blue areas on the chart, these periods — when Value outperforms Growth — often coincide with inflationary environments, rising rates, and a market that starts caring about valuations again.

At ECP, we remain firmly in the Value camp. Not because it’s fashionable, but because it works — if applied rigorously and with patience. We invest in companies, not narratives. And when earnings power is mispriced, long-term opportunity arises.

Source: Nykredit Asset Management, Morningstar Direct. MSCI World Growth / MSCI World Value (Net Return, EUR, 1974=1).