Events | 15 October 2026

Deep Value

A High Conviction Idea in the Current Market Environment

Overview

Deep value is one of today's most compelling investment opportunities. Implementation is crucial. In this webcast, Tommy Garvey of GMO's Asset Allocation team explained why we hold that conviction, and how our Global Opportunistic Value Strategy is designed to capture the potential rewards more effectively than traditional value approaches.

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*This content is intended for accredited investors only. 

Key Points

Why Value?

  • Many of the best bargains are found in the cheapest 20% of the market, and they have found their way there by merely being unexciting, not because they are “cheap for a reason”.
  • Historically, cheaper stocks have tended to outperform by even more during periods when value outperforms. 

Why Now?

  • Much of the last decade’s growth outperformance and current high valuations rely on investor exuberance, forecasting better and better earnings, and applying higher and higher multiples to those earnings.
  • Value is much cheaper than normal relative to the market (see chart below).

VALUATION GROUPS IN MSCI ACWI UNIVERSE

Preliminary as of 9/30/2026 | Source: GMO 
Stock valuations are calculated on a blend of Price/Sales, Price/Gross Profit, Price/Economic Book, and Price/Normalized Earnings. Groups of value and market are weighted by square root of market cap. Groups have the same country exposure as the universe. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Please visit https://www.gmo.com/americas/benchmark-disclaimers/ to review the complete benchmark disclaimer notice.

Thoughtful Implementation is Key to Capturing the Opportunity

  • Reported financials and simple value metrics can be misleading. We rebuild financials from the bottom up to properly account for intangibles and to remove distortions caused by share buybacks.
  • Using a Quality overlay is essential, as some companies deserve to trade at a premium to the market, and some deserve to trade at a discount.
  • Allowing for a reasonable assessment of future growth prospects provides a more accurate picture than just looking at current fundamentals.
  • For these reasons, buying a value index or ETF does not make the most of the exciting value opportunity.
Risks associated with investing in the Strategy may include: (1) Market Risk - Equities: the market price of equities may decline due to factors affecting the issuer, its industries, or the economy and equity markets generally. Declines in stock market prices generally are likely to reduce the net asset value of the Fund's shares; (2) Management and Operational Risk: the risk that GMO's investment techniques will fail to produce desired results, including annualized returns and annualized volatility; and (3) Non U.S. Investment Risk: the market prices of many non-U.S. securities (particularly of companies tied economically to emerging countries) fluctuate more than those of U.S. securities. Many non-U.S. markets (particularly emerging markets) are less stable, smaller, less liquid, and less regulated than U.S. markets, and the cost of trading in those markets often is higher than it is in U.S. markets. This is not a complete list of risks associated with investing in the Strategy. Please contact GMO for more information.
Disclaimer: The views expressed are the views of Tommy Garvey and Mary Ampah through the period ending October 15, 2026, and are subject to change at any time based on market and other conditions. This is not an offer or solicitation for the purchase or sale of any security and should not be construed as such. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations topurchase or sell such securities.

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