Animal Spirits Podcast Talk Your Book: Value + Momentum: The Best of Both Factors
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Oct 20, 2025 Lance Humphrey, head of portfolio management at Victory Capital, shares insights on integrating value and momentum in investing. He discusses why value strategies attract more capital than momentum and highlights the risks of high-valuation momentum. Lance explains Victory's approach to portfolio construction, utilizing a blend of value and momentum signals to navigate market conditions. He also uncovers the different behaviors of these factors across various markets and emphasizes the importance of risk-adjusted weighting for optimal performance.
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Momentum Works But Can Crash Alone
- Momentum is a durable factor: stocks in motion tend to stay in motion, but pure momentum can lead to crashes when valuations are extreme.
- Victory balances momentum with valuation to avoid buying highly priced names that later collapse.
Find Stocks With Both Strengths
- Victory aims to find stocks that score well on both value and momentum rather than extreme exposure to one factor.
- Combining attributes seeks the equivalent of 'tall and fast' stocks that share both strengths.
Why Value Attracts More Money
- Value is more intuitive and easier to sell because people like bargains, while momentum feels counterintuitive to many investors.
- That intuition helps explain why far more assets sit in value strategies than momentum ones.