Investors Still Chasing Low Quality, But Graham Value In US, Japan

The January sell-off exposed the fact that investors were still pushing money into low quality stocks compared to quality names.

“Despite the very weak market performance in the latter part of January, it was still the low quality names that showed the best returns overall last month, whilst managing positive absolute performance in many regions,” says a research report from SocGen analysts Andrew Lapthorne, Rui Antunes, John Carson, Georgios Oikonomou, Michael Suen and Josh Cherian. “Low quality did underperform during the market decline, as you would expect, but the extent of the “risk-off trade” was not enough to offset the strong outperformance of low quality earlier in the month.”

High quality vs. low quality stocks

The SocGen report analyzes the results of...