TORONTO and BOSTON, Aug. 15, 2017 /PRNewswire/ -- Manulife Asset Management today released a new report that outlines the importance of locating value at a time when equity prices have dominated investor discourse.
Written by Paul Boyne, senior managing director and lead portfolio manager of the firm's Global Equity strategy and team, the paper questions whether or not investor expectations regarding current market momentum are realistic, given that the Cyclically Adjusted Price-Earnings (CAPE) ratio has only ever been higher in 1929 and 2000 – years associated with major market corrections. The CAPE ratio is calculated by taking the S&P 500 and dividing it by the 10-year average of earnings.
In this paper, Boyne takes a closer look at various valuation metrics and identifies components he believes are critical to understanding the concept of value. He concludes that an investment approach focused on the intersection of value and quality could provide investors with the returns they seek, while offering downside protection.
"This is an environment well-suited for active managers who understand the need to examine the world through critical lenses," Boyne said, noting the need to battle herd-mentality and short-termism. "As bottom-up, long-term investors, we believe it is important to focus on the optimal mix between quality and valuation as this intersection of the market is rewarded over the long-term."
"Understanding Value in a Valuation Rich Environment" is available at www.manulifeam.com.
About Manulife Asset Management
Manulife Asset Management is the global asset management arm of Manulife, providing comprehensive asset management solutions for investors. This investment expertise extends across a broad range of public and private asset classes, as well as asset allocation solutions. As at June 30, 2017, assets under management for Manulife Asset Management were approximately C$480 billion (US$370 billion, GBP£285 billion, EUR€324 billion).
Manulife Asset Management's public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in China, Manulife TEDA. The public markets units of Manulife Asset Management also provide investment management services to affiliates' retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management is a division of Manulife Asset Management.
Additional information about Manulife Asset Management may be found at ManulifeAM.com.
Manulife Financial Corporation is a leading international financial services group that helps people achieve their dreams and aspirations by putting customers' needs first and providing the right advice and solutions. We operate as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions. At the end of 2016, we had approximately 35,000 employees, 70,000 agents, and thousands of distribution partners, serving more than 22 million customers. As of June 30, 2017, we had over $1 trillion (US$780 billion) in assets under management and administration, and in the previous 12 months we made $26.7 billion in payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges and under '945' in Hong Kong.
SOURCE Manulife Asset Management