Is Amos Value a pure value fund?

Amos Value is a value fund in the sense that a margin of safety against fair value is always required. But we do not chase low multiples. We chase mispricing. That means companies whose quality and future cash flows the market is temporarily undervaluing. It requires the business model to be understood and quality to be high. The label is not chosen. The process is.

How do value funds perform relative to growth funds?

It varies greatly depending on market regime. During periods of low interest rates and high optimism, growth stocks tend to dominate. In normalised interest rate environments and during market downturns, value strategies tend to recover ground. No strategy always wins.

Why have value funds underperformed in recent years?

This is partly due to an exceptional low-rate environment that favoured discounting future earnings, partly due to flows towards passive index funds and partly due to actual earnings growth in the companies dominating the index. It is not proof that the value strategy is broken.

Glossary

Value fund

A fund that systematically looks for companies trading below their true value. But value is about more than just low multiples.

What it is

More than low multiples

A value fund is an equity fund that applies the principles of value investing. This means the manager systematically searches for companies whose market price falls below the estimated intrinsic value, with the goal of profiting when the market eventually recognises the true value. Value investing as a philosophy was popularised by Benjamin Graham and developed further by Warren Buffett. But there are many interpretations. Some value funds chase companies with low P/E and P/B multiples regardless of quality. Others seek quality companies that are temporarily mispriced by the market.

Cheap stocks vs quality companies: Traditional value funds buy what is cheapest. The goal is to buy what is cheaper than it should be, and that is an important distinction.
Time and patience horizon: Value does not always materialise quickly. Owning a value fund requires patience to sit through periods when growth stocks dominate.
Resistance to FOMO: One of the strengths of a value fund is the built-in brake against FOMO. One does not buy hope but companies whose earnings can be calculated and whose price is right.

Quality value vs discount value

Quality value, not discount value

Amos Value is a value fund in the sense that a margin of safety against fair value is always required. But it is not a classic "deep value" fund that buys the cheapest regardless of everything else. Value investing here is combined with a quality requirement. A company is not bought just because it looks cheap, but because the business model is understood, competitive advantages are clear and the price is below fair value. The result is a fund that avoids value traps: companies that are cheap for good reason.