Active equity investing strategies

Question 1

Value-based approaches

Answer 1

1. Relative value
2. Contrarian investing - purchase and sell shares against prevailing market sentiment
3. high-quality value: a record of consistent earnings power, above-average return on equity, financial strength, and exemplary management.
4. Income investing: high dividend yields and positive dividend growth rates
5. Deep-value investing: extremely low valuation relative to their assets (low P/B)
6. Restructuring and distressed investing
7. special situations

Question 2

growth-based approaches

Answer 2

Have a high tolerance for above-average valuation multiples

GARP (growth at a reasonable price)