For several years, the growth investment strategy reigned supreme in UK equities, as well as further abroad. But after the value rebound towards the end of 2020, UK value fund managers entered 2021 optimistically, and saw their outlook rewarded in the first quarter of last year as several well-known value funds garnered double-digit returns. But growth wasn’t quite ready to be sidelined, contends an article in Morningstar, and for the rest of 2021 the MSCI UK Growth Index outperformed its value index counterpart.

But that didn’t necessarily mean that growth funds were the best choice for everyone last year. Indeed, the top 5 performers in Morningstar’s UK large-cap equity, UK flex-cap equity and UK equity income categories all have strategies that lean toward value-conscious. The article points to the market-cap level; small-cap value greatly outperformed small-cap growth in 2021—19.1% versus 9.4%, which could have fueled value funds with allocations to stocks further down the market-cap scale.

Additionally, energy performed big in the UK with a 31% return as oil prices climbed. In the energy sector, value funds are generally weighted higher than growth. Lastly, many of the highest-performing value funds saw benefits from active management during a time where there were “fewer market headwinds,” the article contends.

Now, value is very clearly outperforming growth in every area of the market, with the MSCI UK Value Index outperforming the growth index by over 13.5%. That picture stays the same down the market-cap scale. Further, almost all of the top Morningstar-rated funds are tilted toward value and are outperforming the FTSE All-Share Index so far this year. One such fund is Schroder Income, which takes a deep-value approach to equity income investing. While the fund has suffered from short-term volatility, such as a major dip in early 2020 from pandemic market losses, it’s weathered the long-term well, and can serve as an example of the main qualities a value investor must have: patience, and a long-term mindset.