The Investec Wealth Forum - Growth vs Value investing – inside a fund manager’s mind

Growth vs Value investing – inside a fund manager’s mind

10 August 2017

Two of the world’s leading fund managers give their opinions on investing in the US, emerging markets, tech and resources.

Sunil Thakor

Managing Director, Sands Capital Asset Management, USA

Dave Iben

Top Performing Global Equity Manager, 2016. Chief Investment Officer, Kopernik Global Investors USA

Growth vs value investing is one of the enduring debates within the investment field. Investec Wealth & Investment was privileged to host two of the leading exponents of the two schools of investing at the recent Investec Wealth Forum, Sunil Thakor and Dave Iben.

While they may have differing investment philosophies and not a single stock in common, they agree on looking outside the US for investment opportunities – though for very different reasons.

Sunil Thakor, Managing Director, Sands Capital Asset Management, is a true growth investor, scouring the world for opportunities in the most unlikely of places.

Dave Iben, Chief Investment Officer, Kopernik Global Investors, was voted the “Top Performing Global Equity Manager, 2016”. A true value investor, Dave doesn’t believe in over paying for any stocks.

Both Sunil and Dave are two of 18 exceptional investment managers in Investec’s World Axis Fund range – a global multi-manager fund offering that aims to deliver consistent, risk-adjusted returns to investors. They were participants in the recent Investec Wealth Forum, hosted by Investec Wealth & Investment, in Johannesburg and Cape Town.

Ryan Friedman, Head: Multi-Manager Investments, Investec Wealth & Investment SA, moderated a panel discussion between them.

Key highlights include:

  • Both fund managers hold the view that the US market is too expensive and there are better opportunities to be found around the world, with emerging markets making up 30% of both fund managers’ investments.
  • The trend of passive investing is resulting in investors following the pack, without doing enough of their own analysis, resulting in indices that aren’t reflective of the market.

Key excerpts:

  • “All of us are looking for quality as a first step. Sometimes, they forget an equally important step that is to ask: what is the price?” Dave Iben
  • “At Sands, what we are looking for are businesses that are something today, but could be something very different in the future. That’s what a growth investor does.” Sunil Thakor
  • “Indexes are an example of a very good idea that when it becomes too big, it becomes a bad idea.” Dave Iben
  • “It’s the top 30 [in the index] that drive performance, so why own the rest? I’m not diversifying when I own 100 or 200 stocks, I’m diworsifying.” Sunil Thakor
  • “To us, growth is a wonderful attribute. Value is a prerequisite for us. Why ever overpay for something? So we are looking for value, growth increases the value. Occasionally you can find growth and value in the same place.” Dave Iben

Watch the video of the panel discussion here:

Topics and time codes:

  • 00:09: Dave Iben on why the “US is a great place to live, but a terrible place to invest”
  • 01:20: Value vs growth investing – what Dave Iben and Sunil Thakor have no stocks in common
  • 02:22: Dave Iben on why indexes are no longer representative of the market
  • 03:40: What constitutes risk for value and growth investors? Volatility doesn’t matter if you have a long-term investment framework
  • 04:21: Sunil Thakor: “I’m not diversifying when I own 100, 200, 300 stocks, I’m diworsifying”.
  • 05:5: Dave Iben on how emerging markets “offer growth and value in the same place”
  • 06:00: Dave Iben on why 14% of his 30% ownership in emerging markets is in Russia
  • 06:50: Sunil Thakor on why India is a fascinating investment destination for a growth investor
  • 07:48: Sunil Thakor on why 30% of his portfolio is in technology and what investors should look for in tech
  • 08:38: Dave Iben talks about why 40% of his portfolio is invested in resources

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