Barrow & Hanley head of US equities Mark Giambrone makes the case for an allocation to US midcaps
The idea the US market is expensive is a generalisation, argues Mark Giambrone, head of US equities at Barrow Hanley. “There is a belief out there the US market has got expensive over the last several years,” he says in the above video. “But the reality is it is just the top portion of the market that is expensive – led by the ‘Magnificent Seven’ and, really, the top quintile or so of the market.”
Oftentimes, with midcaps you are beyond the place of highest risk but you are before the potential for significant growth.”
If you look below that, Giambrone argues, there is “significant value” to be found in US equities. “Growth rates look good, the economy is relatively healthy – and so we think there is significant opportunity for the market broadly,” he continues. “And, as we move through the next economic cycle, we believe the market is going to broaden out – and, through broadening out, there is lots of opportunity, from an active management perspective, to go in and select stocks that can significantly outperform.”
Active stock selection
Honing in on the US midcap space, Giambrone says: “This is a very unique place where active stock selection and creating differentiated views to pull returns is a tremendous fishing pond. Oftentimes, with midcaps, you are beyond the place of highest risk but you are before the potential for significant growth – and then populating a portfolio of highly-concentrated, high-conviction names in that particular space can really drive high returns over time.”
You can view the whole video by clicking on the picture above. To jump to a specific question, just click on the relevant timecode:
00.00: As things stand, what is the case for investing in US equities?
00.46: Why should investors choose Barrow Hanley over your peers?
01.12: What is the case for US midcap equities specifically?
