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Why Recession Chatter Benefits GARP

Russ Koesterich, CFA profile picture
Russ Koesterich, CFA


  • With oil prices spiking and investors avoiding volatile names, only a few themes have worked: energy and defensive stocks.
  • With economic growth likely to slow and earnings growth harder to come by, companies able to grow earnings should garner renewed interest.
  • To the extent recession fears are now competing with inflation for investor mindshare, look to add beaten-up GARP names.

Growing Graph

Eoneren/E+ via Getty Images

Originally posted on April 21

Russ Koesterich, Managing Director and Portfolio Manager of the Global Allocation team, discusses the case for the cheaper segments of growth stocks.

While equities are up from the March lows, actual

This article was written by

Russ Koesterich, CFA profile picture
Russ Koesterich, CFA, JD, Managing Director and portfolio manager for BlackRock’s Global Allocation Fund, is a member of the Global Allocation team within BlackRock's Multi-Asset Strategies Group. He serves as a member of BlackRock's Americas Executive Committee. Mr. Koesterich's service with the firm dates back to 2005, including his years with Barclays Global Investors (BGI), which merged with BlackRock in 2009. He joined the BlackRock Global Allocation team in 2016 as Head of Asset Allocation and was named a portfolio manager of the Fund in 2017. Previously, he was BlackRock's Global Chief Investment Strategist and Chairman of the Investment Committee for the Model Portfolio Solutions business, and formerly served as the Global Head of Investment Strategy for scientific active equities and as senior portfolio manager in the US Market Neutral Group. Prior to joining BGI, Mr. Koesterich was the Chief North American Strategist at State Street Bank and Trust. He began his investment career at Instinet Research Partners where he occupied several positions in research, including Director of Investment Strategy for both U.S. and European research, and Equity Analyst. He is a frequent contributor to financials news media and the author of two books, including his most recent "The Ten Trillion Dollar Gamble."Mr. Koesterich earned a BA in history from Brandeis University, a JD from Boston College and an MBA from Columbia University. He is a CFA Charterholder.

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Comments (5)

I like the ETF SPGP
With DXY, the US Dollar index, pushing 104, near twenty year highs suggesting a crash in oil prices is imminent, I would not be pushing too energy or commodities heavily into a recession. Typically oil a la petrodollar works in reverse to DXY, sometimes catastrophically. I can only think the Russian 'embargo' is responsible for the current price. That will eventually price out as other suppliers start feeling the pinch of lower priced 'embargo' crude oil.
You don't explain, exactly, what GARP is or how one determines what is and is not GARP.
@dlhatheway you're right, the article only calls
“growth at a reasonable price”, not which stocks or ETF's are GARP
Which names do you like?
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