In this report, we complement the performance reports of our portfolios as of June 2025 with a review of the behavior of the Value ETF portfolios.
This article is also an opportunity to analyze the overall performance of the value factor globally and of several popular active value funds in Spain.
Value stocks have lagged again in 2024
In our previous report on Value Investing, we noted that 2024 was another year where value investing lagged behind.
In the chart above, it can be seen that, as of the end of June 2025, value stocks (+9.1%) have outperformed the MSCI World (+8.6%), while growth stocks (+8.2%) have lagged behind, falling a few tenths below the MSCI World and nearly a full percentage point below value stocks. During the tariff crisis, they fell sharply (-17.4%), almost 11 percentage points more than value stocks (-6.5%).
Still, value stocks remain historically lagging
Since the launch of our Value ETF portfolios, we have reported the significant underperformance that still persists despite this slight improvement: value investing has returned 78%, compared to 125% for the main index, and especially compared to growth stocks, driven by tech companies, which have delivered an exceptional 173%, or 14.3% annualized.
As shown in the chart below, even though the gap has now narrowed to 6.3 percentage points, this period still marks the largest performance gap, followed by the 2015–2024 period. Looking further back, for example since 2000, both styles show more similar annualized returns, around 6%.
Value investors continue to wait for mean reversion. For this reason, maintaining exposure to the value factor may be a good strategy for those who believe in its long-term advantages. And they have reason to: since 1995, the difference between growth (9.2% annualized) and value (+8%) is 1.2 percentage points, which translates into significant cumulative differences (1384% vs. 950%). The evolution in 2025 may offer some renewed hope for value investors.
Note: returns measured in euros differ slightly in some periods due to currency effects, but the differences between the indices obviously remain.
Excellent returns for value portfolios as of June 2025
In 2025, all our portfolios have shown more dispersed returns due to their different characteristics.
Our value-indexed ETF portfolios have benefited from the relatively strong performance of value equities, especially in equities. As of the end of June 2025, returns ranged from 1.5% for profile 1 (1.9% for the same profile in the standard indexed ETF portfolio) to 6.2% for profile 10 (4.8% for the same profile in the standard ETF portfolio). On average, the value ETF portfolios achieved a 4.1% return, which is 1.3 percentage points higher than the standard ETF portfolios, in line with the better relative performance of value mentioned earlier. These favorable differences are more pronounced in profiles 7 to 10.
However, when we look at the long term, value investing has delivered weaker results since 2018. As a result, our value portfolios have had an average annualized return approximately 0.8% lower than our standard ETF portfolios.
Our indexed value portfolios outperform benchmark value funds
In 2025, once again, the lack of consistency of active funds is confirmed. The inbestMe Value 10 portfolio achieved the best return with +6.4%, followed by COBASIN (+4.4%), BESTINT (+1.9%). AZVAINT, which was the star fund in 2021 and 2022, was the worst in 2024 and remains the worst as of June 2025, being the only one in negative territory with -1.7%.
Our indexed value portfolios will always be among the top performers
Since launching our Value portfolios in early 2018, we have periodically compared them to some of the most popular Value funds in Spain. These portfolios have weathered several tough situations, such as the 2018 correction, the COVID-19 bear market, and the inflation/Ukraine war downturn. 2023 and 2024 were years of recovery, and so far in 2025 we’ve experienced the tariff crisis.
Our indexed Value portfolios reached 7.5 years of life as of June 2025. We conducted a detailed analysis at the end of 2022 comparing the following Spanish value funds: Azvalor Internacional FI (AZVAINT), Bestinver Internacional FI (BESTINT), Cobas Internacional FI (COBASIN). The inbestMe ETF value portfolio is represented in the table as inbestMe10.
Continuing this analysis, the best-performing fund from 2018 to June 2025 is Azvalor Internacional (AZVAINT), thanks to its outstanding results in 2021 and 2022 — which are probably unrepeatable.
In the last three periods, AZVAINT has been the worst-performing fund, again showing -1.72% so far in 2025. This confirms that past performance is not indicative of future results: an investor who had entered AZVAINT in early 2023 would have accumulated an 8% return, while the inbestMe10 portfolio has achieved a much higher 38% in the same two-and-a-half-year period.
While the inbestMe10 portfolio may not be the best every single year, after 7.5 years it stands out as the second-best performer, with a 58% cumulative return, equivalent to a 6.3% annualized return (CAGR).
Let’s remember that one of the main problems with active management is its lack of consistency. Statistics show that about 90% of active funds do not beat their benchmarks — and if they do, it doesn’t guarantee they will in the future. Our repeated analyses consistently demonstrate this: one year a manager may outperform (e.g., Cobas this year), another year it may be someone else (e.g., Azvalor in 2022). Over the long term, index management prevails. In this case, with a value tilt, our portfolio is always among the top performers.
Our indexed value portfolios carry much lower risk and are therefore more efficient
Our indexed value portfolios carry significantly lower risk and are thus more efficient and better suited for most value investors who want to avoid the unnecessary risks associated with active “star manager” funds that often make very aggressive bets on specific companies or sectors.
Active value funds tend to make highly specific bets, deviating significantly from the index, resulting in high volatility and much larger drawdowns: -62% for COBASIN, -54% for AZVAINT. The maximum drawdown for BESTINT has been -37% (this fund seems “more indexed”), while inbestMe10 stands out with the lowest drawdown (-34%).
The following table summarizes the most relevant data:
As shown, the analyzed value funds maintain high volatility (a risk indicator), ranging from 18% for BESTINT/COBASIN to 19% for AZVAINT, placing them further to the right (higher risk) in the chart.
The inbestMe10 portfolio stands out in the chart above, showing lower volatility (14%) compared to the value funds, with a return-to-volatility ratio of 0.46. AZVAINT, despite having the highest annualized return, also has the highest volatility (19%) and, although it achieves the best risk-adjusted return (0.48), the difference with inbestMe10 (0.46) is minimal. BESTINT and COBASIN show significantly lower and quite poor ratios (0.26 and 0.18, respectively).
In conclusion, our indexed value portfolios offer lower volatility and drawdowns, ranking second in both absolute return and risk-adjusted return. They are therefore an attractive option for investors seeking value exposure while avoiding the extreme risks associated with some active value funds. Our clients can also adjust their risk by choosing from profiles (1 to 10) with less equity exposure.
You can review previous reports:
- Exceptional returns of inbestMe Value ETF portfolios in 2024
- inbestMe Indexed Value Portfolios in 2023
- inbestMe Indexed Value Portfolios in 2022
- inbestMe Indexed Value Portfolios in 2021
- Our Indexed Value Portfolios Continue to Beat Active Funds (2020).
