Lack of Liquidity Provides Opportunity For Value Investors

With a lack of liquidity as a primary driver, there is a global liquidity mis-pricing, particularly outside the U.S. market. S&P Market Intelligence “Quantamental” researchers Frank Zaho and Richard Tortoriello observed tracking trends noted regional differentials. In a March report asking the question is stock-level liquidity is alpha or risk, the duo pointed out the least level of liquidity is found in Asia ex-Japan. Since 2008, European liquidity has not recovered to the same extent as it has stateside. Liquidity levels in markets present unique situational investing exposures, as low liquidity markets are typically avoided by momentum-based systems and can…