Growth or value? Play both sides

By Katie Keir | September 4, 2020 | Last updated on December 6, 2023
2 min read
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As stock markets have surged back from the market crash earlier this year, growth stocks have once again led the way.

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“Growth has been the clear winner” for several years and reasons, according to Amber Sinha, senior portfolio manager for global equities at CIBC Asset Management.

The cycle has seen slow GDP growth in various jurisdictions, not the “strong, booming economy” that tends to support value stocks and the long-term earnings outlooks for companies in that bucket, he said.

The low interest rates since the 2008-09 financial crisis tend “to supercharge growth stocks because we’re eventually discounting their future cash flows at lower and lower interest rates,” Sinha said in a late-August interview.

A third catalyst is the dominance of technology stocks, which have thrived during the pandemic and lifted markets higher this year.

“Growth has outperformed value consistently over many years,” said Sinha, who manages the CIBC European Equity Fund and the CIBC Asia Pacific Fund.

“Value would work if we had stronger economic growth on its own, as opposed to a growth driven by stimulus. When that time comes, these trends might change a little bit.”

Playing both sides

Rather than focusing on one particular investment style, Sinha prefers to focus on quality.

“While a value manager might not buy technology stocks, we want to buy some. While a growth manager would not want to buy energy or financial [stocks], we might want to buy some,” he said.

Similar to growth stocks, quality picks tend to benefit from low interest rates, Sinha said.

In recent months, he’s looked for opportunities outside of the U.S., where stock markets have recouped the losses from earlier this year despite the global recession and ongoing pandemic.

“The U.S. recovery in the stock market has probably run a little bit ahead of itself,” Sinha said.

The U.S. election in November also poses risks.

“We are trying to steer clear of names that could be controversial around an election or stocks that could have a binary outcome depending on whether Trump wins or the Democrats win,” he said.

One portfolio winner has been Chicago-based consumer credit reporting agency TransUnion, which Sinha said “meets a lot of the things that we look for in stocks” in terms of “higher quality, strong management, sustainable competitive advantages, a healthy balance sheet and higher returns.”

Some risks to monitor for that investment, he said, are housing market developments and the pandemic-tied recession’s impact on lending.

TransUnion is neither a growth stock or a value stock, he said. “It’s just a good company […] where we see the longer-term opportunity as being worth taking the risk at this point.”

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Katie Keir

Katie is special projects editor for and has worked with the team since 2010. In 2012, she was named Best New Journalist by the Canadian Business Media Awards. Reach her at