Grantham, Mayo, Van Otterloo & Co Launches New UCITS Fund
Grantham, Mayo, Van Otterloo & Co. (GMO) has launched the GMO Equity Dislocation Investment Fund (EDIF), a new UCITS fund. Co-led by Ben Inker (Head of the Asset Allocation team) and Simon Harris (Head of the Global Equity team), the EDIF seeks high total return by taking 100% long and 100% short positions in equity securities in markets across the world, and aims to capitalize on what the firm views as an extreme valuation spread between value and growth stocks today.
Ben Inker, Head of the Asset Allocation team and a member of the GMO Board of Directors, said: “We believe the current valuation spread between value and growth is absurdly wide. This extreme dislocation in the market provides one of the most exciting investment opportunities we have seen in decades. In the last decade, growth has had its longest ever run of outperformance versus value. This has pushed the discrepancy in pricing to such an extreme that we felt we had to act. If someone decides not to invest in value now, they never will.”
Simon Harris, Head of GMO’s Global Equity team, added: “Some of the ‘stay-at-home’ stocks have been crazy but we are not deliberately targeting COVID-hit areas and rather are targeting cheap versus expensive. There is nothing wrong with secular growth provided it is priced properly, so we have adjusted the short portfolio to capture companies where the valuations reflect overly optimistic and unreasonable growth expectations. Likewise, we want the long side to reflect not just value, but rather companies we believe have been treated unfairly by the market. The portfolio is our view of cheap versus expensive, it is not just purely banks against tech firms, or a big bet against the FAANGs.”
GMO Equity Dislocation Investment Fund joins a range of other UCITS offered by GMO including equity, fixed income, and multi-asset strategies.
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