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July 2024 · 5 min read

Building a value strategy with Xplore Stocks


In the Xplore Stocks glossary post we give brief descriptions of all the metrics we surface to our users so they can build their own investment strategies. We now illustrate the construction of a simple value strategy using Xplore Stocks and show all steps involved in its construction.

As we have discussed in a previous value factor post, over the last decade from 2010-2020 the value factor has had a tough time and struggled to keep pace with the S+P 500, which was driven by a strong quantitative easing tailwind and a tech/growth trend. However, there has been a pullback in the markets with the new inflationary environment in 2022. It has been mentioned by a large cohort of market commentators that value stocks and the value factor, in particular, are primed for a strong decade ahead. This has already been evident in 2021 and 2022 where the value factor has performed very well, as referenced by Blackrocks Andrew Ang.

Value and min vol strategies are made for these times, with value strategies historically outperforming growth in periods of high inflation, as evidenced by factor returns we analyzed going back to the 1920s.

So with all that said, let's walk through from start to finish an example of how to use Xplore Stocks to build your very own value investing strategy.

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