December 21, 2018
Ten years into a bull market, the conventional wisdom is that U.S. stocks are richly valued based on most well-cited metrics. Fortunately, solid investment opportunities remain in places that some value investors may find surprising. This is why the GMO Quality Strategy remains fully invested in equities. We invest globally, yet the portfolio holds primarily U.S. domiciled companies. Nearly half of the portfolio is invested in technology stocks. And rather than invest in beaten up value stocks, the portfolio trades at an aggregate P/E in line with the S&P 500. But price is not value. We believe these securities, selected through a fundamental bottom-up process that focuses on quality companies, are valued to deliver solid returns with below market levels of risk.
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