After suffering the worst ever quarter in early 2020, the value investing strategy is being questioned by asset managers who are “getting vocal about the strategy’s longer-term prospects.” This according to an article in Institutional Investor.

The article cites a recent blog post written by AQR’s Cliff Asness that made a case for value “and put to the test some popular arguments that the investing style has stopped working.” But in a webinar earlier this month, Asness acknowledged that “the world, particularly for value investors, went nuts very recently after already being terrible for value investors,” noting that the spread in valuations between the most expensive and the cheapest stocks is the “highest we’ve ever seen.” He attributes the spread to investors’ paying “way more than usual for the stocks they love versus the ones they hate,” noting that the behavior is not based on what he would consider “a great, rational economic story.”

Comments that echoed this sentiment were reported from Ariel Investments CEO John Rogers who at a recent web event argued, “There are just extraordinary bargains there. I think it’s going to be a violent turn that will give value investors a great opportunity over the next decade.” Harris Associates CIO David Herro believes that value’s underperformance has spooked investors: “There’s so much underexposure to these businesses,” he noted, adding, “I don’t know exactly what the catalyst will be—probably some view of the light at the end of the tunnel in terms of economic recovery. But when it does happen, I think it will be to value.”

According to Asness, “We say timing is an investing sin, but we’ve also said we can sin a little at true extremes. We don’t know when, but we believe value will come back, and be big.”