For over a century, value stocks have consistently outperformed growth stocks by an average of 3.3% annually. Yet between 2007 and 2020, this dynamic reversed, with growth stocks, particularly in technology, dominating the market and leaving value behind by 5.7% per year. Since 2021, however, value has staged a remarkable comeback, outperforming growth by 9% annually on a global scale, with even stronger gains in Europe and in Japan.
This resurgence has been driven by geopolitical and economic shifts, including the Ukraine war and Middle East conflicts, which have sent commodity prices soaring. Inflation and lingering supply chain disruptions have further amplified demand for tangible assets, creating a tailwind for value-oriented sectors.
Today, the most compelling opportunities lie in regions and sectors deeply tied to commodities and materials. The UK, with its concentration of oil and gas producers, and Latin America offer exposure to resource-driven growth at attractive valuations. Meanwhile, sectors like mining, building materials (fueled by post-conflict rebuilding), and even European banks - with their strong capital positions and high dividend yields - present undervalued potential.
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