The valuation gap between cyclical and defensive stocks reached historic highs recently. Causeway portfolio manager Ellen Lee spotlights opportunities in undervalued cyclicals.
- Driven by risk aversion and negative interest rates, defensive stocks are historically expensive relative to cyclicals, in many cases surpassing GFC levels.
- By focusing on valuation, investors can benefit from a renewed focus on company fundamentals.
- Value stocks, including many cyclicals, are primed to rebound.