Broken Data. Hidden Opportunity | GMO's Warren Chiang on Deep Value’s Historic Setup

Excess Returns

GMO’s Warren Chiang joins us for a deep dive into the art and science of systematic value investing. In this episode, Warren shares how his team has refined traditional value investing to adapt to an intangible-heavy world, the structural reasons deep value is historically cheap today, and how top-down insights from GMO’s asset allocation group are implemented in practice. We also explore how ESG, momentum, macro, and geopolitical shifts—including the China decoupling—are integrated into portfolio construction, and what investors can learn from GMO’s global perspective on valuations.

Topics Covered:

Why GMO didn’t abandon value—it improved it

The difference between "value" and "valuation"

How restating financial statements improves valuation accuracy

GMO’s two-step top-down and bottom-up ETF strategy

The deep value opportunity: why it’s never been cheaper

How GMO incorporates quality in a forward-looking way

Why momentum and macro are excluded from some strategies

How ESG is treated as a portfolio risk—not virtue signaling

The China supply chain shift and the Beyond China strategy

Passive investing’s long-term impact on price discovery

Managing risk, constraints, and position sizing in quant portfolios

Whether today’s market mirrors the dot-com bubble

What’s driving valuation gaps across global markets