Value style is poised to outperform, CI manager says

When interest rates rise, says Roger Mortimer, the tide will turn against expensive growth stocks.

Michael Ryval 1 October, 2015 | 5:00PM

Stock-market sentiment will shift in favour of value stocks after the U.S. Federal Reserve raises its federal funds target rate, says Roger Mortimer, lead manager of the $4.9-billion CI Harbour Growth & Income.

The U.S. economy is improving, says Mortimer, senior vice-president at Toronto-based CI Investments Inc. Yet deflationary forces are creating an uncertain global environment. In Mortimer's view, the Fed's Sept. 17 decision to leave its benchmark rate unchanged is a signal that "it's not quite an all-clear message."

Nevertheless, a rate hike is inevitable and the pace of further increases will depend on the global recovery. "We are in a wait-and-see situation where the Fed wants to communicate that things are OK and getting better, but not at such a rate that it needs to do anything too hasty."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Apple Inc323.34 USD0.46
General Electric Co7.05 USD4.29

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Michael Ryval

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