I'll add the definition of value stocks in to the OP.

Historically, value stocks tend to trade at P/E ratios as high as between 10 and 15, though this varies across sectors. So let's cap this at 15 and it may also include discounts. I wonder what range Morning Star uses.

What's the view on this?

https://www.vanguardinve...ulation-shares/overview

Holding Name % of funds
Merck & Co Inc 1.99%
Johnson & Johnson 1.97%
Bank of America Corp 1.87%
Philip Morris International Inc 1.76%
FinecoBank Banca Fineco SpA 1.73%
Novartis AG 1.73%
AstraZeneca PLC 1.71%
TotalEnergies SE 1.68%
Cisco Systems Inc 1.62%
Deere & Co 1.56%

It's worth remembering the stock market sell off in 2018 was driven by trade tensions, fears of slowdown in the US, and rising interest rates. Sounds familiar?

And during that time, Value performed horribly.

So it's not quite as clear cut as some suggest that these specific conditions = value outperforming.

It might, but it also might not. It's a bet basically.

Good = low fees
Bad = consistently poor performance historically

But who knows how it will perform in future.

Using their own data from the link shared, their performance vs the benchmark they've chosen;

2017 = -0.6%
2018 = -3.12%
2019 = -8.18%
2020 = -13.66%
2021 = -0.93%
2022 = +17.81%
2023 = -11.53%
2024 = -6.52%

That's 7 misses out of 8 attempts.

We can't rebuy 2022's performance unfortunately.

Now performance vs a benchmark of course isn't the be all and end all. These days I honestly don't have an issue with a fund that doesn't beat a benchmark if it does something else for me.

For example if it has lower drawdowns and lower volatility, I can understand swapping some returns for that defensiveness. In fact I'm all for that - I prefer active funds that play defence rather than try to "outperform".

But this one has been more volatile with bigger drawdowns too.

So I'd basically be paying them to give me more volatility, bigger drawdowns and to underperform against the benchmark.

That's probably true, but if it is that's solely driven by 2022's performance as they are behind it every single other year.

So if we think 2022 is going to repeat it's a great shout. If we don't then it's probably quite a hard pass.

Is this any different to looking back at Baillie Gifford funds that did amazingly in 2020 and were rubbish before? As in during "normal" circumstances performance was poor, due to having everything set up in their favour to deliver blockbuster outperformance they smashed it out the park in 2020. And since then it's been a poor show.

Personally I prefer things that are consistently there or thereabouts rather than a big boom or bust if that makes sense.

Again, it may go on to do wonderfully well in future - I hope that's the case for anyone who holds it. But it feels like a punt.