P/E effect

P/E effect

That portfolios with low P/E stocks exhibit higher average risk-adjusted returns than those with high P/E stocks. Related: Value manager.

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

P/E Effect

A situation in which a portfolio with a lower average P/E ratio has a higher return (when adjusted for risk) than a portfolio with a higher ratio.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved