Value stocks make a global comeback

Five charts to start your day

The world of investing has a strange rhythm. Since the end of the 2008 Financial Crisis, growth stocks have floated upwards, fuelled by cheap money. Value stocks were left in the shadows, dismissed as relics of a slower age. But it appears fortunes are changing.

Investors are beginning to look differently at the companies they once ignored. Cash flow, dividends and solid balance sheets – the dull virtues of value – suddenly feel desirable again in a world of trade wars and trillion dollar tech companies. The shift is subtle but global, with markets outside the US already showing clear signs that the long sleep of value investing may be ending.

It is too early to call it a comeback, but the signs are hard to miss. When the world stops rewarding promise and starts rewarding proof, it tends to remember what made value investing timeless in the first place. That’s what the first chart is about today. It’s quite profound.

CHART 1 • Value stocks make a global comeback

After a decade dominated by growth stocks, value investing is quietly making a global return. The only major exception is the US, where technology heavyweights continue to drive the market higher. Everywhere else, value has been the winning trade.

The chart shows how value indices have outperformed growth across Japan, Europe and international markets since 2023. In Japan, the MSCI value index has surged ahead of its growth counterpart as corporate reforms and rising dividends draw investor attention. Europe tells a similar story, where traditional sectors like banking, energy and manufacturing have lifted value stocks well above growth peers. Even outside developed markets, small cap and value strategies have led the post rate hike recovery.

Source: Financial Times

The interesting thing about this shift is how quiet it has been. There has been no big moment, no great rotation headlines, just a steady recognition that fundamentals matter again. Inflation and higher rates have stripped away the comfort of easy narratives, and investors are rediscovering the discipline of buying what earns rather than what excites.

The US may still be driven by the glamour of technology and AI, but elsewhere, investors are already moving back to basics. If this continues, it could mark not just a cyclical swing but a structural change in how markets price risk.

I have four more charts today that expand on these themes, from global capital flows to how we perceive risk itself. If you are a paid subscriber, you can access the full edition below. If not, consider joining.

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