• Value has lagged in Europe during the same time, pulled down by the area’s greater indirect exposure to Russia.
  • We believe that the value lag in Europe is likely to be transitory, as the initial impacts of the conflict appear to have been absorbed and should improve as inflationary tailwinds set in.

Over the last 10 days, the extent to which investor portfolios have been exposed to events related to the Russia/Ukraine conflict has trumped more traditional style factors, but it is still possible to draw some conclusions from the relative performance of factor returns.

As shown in Exhibit 1, since Russia invaded Ukraine on 24 February 2022, value (as measured by the SEI Value Factor Family) has been defensive in the US and has been helped by exposure to the energy and utilities sectors, which have risen in tandem with surging oil prices. (Download the full commentary to view data exhibits.)

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