Value stocks have trounced expensive growth stocks in 2022 – the MSCI ACWI Growth index is down 21 per cent, whereas its value counterpart has fallen only 4 per cent – and that trend won’t change any time soon.

So says GMO, the investment firm founded by value investing icon Jeremy Grantham, which recently examined the most expensive and the cheapest fifth of stocks within different countries and regions. Last year, the valuation differential between growth and value stocks hit levels unseen since the peak of the 1990s internet bubble.

Despite 2022′s bloodbath, the current valuation of growth stocks relative to cheap stocks is wider than 91 per cent of readings since 1990.

No single region is distorting the figures, with the value opportunity “broad-based around the globe”. There remains a “tremendous amount of scope” for cheap stocks to keep outperforming their more expensive brethren, says GMO. The growth bubble has “deflated somewhat” but it has “yet to fully burst”.