Like clothes fashions or pop music, investing styles come and go. The approach known as value investing has performed well since the market rally in March, and should continue to do so if or when the global economy recovers, says UBS.

Plotting the performance of the Morgan Stanley Capital International Global Value Index – tracking “value stocks” – the Swiss bank found it delivered returns of 67 per cent since the stock market nadir in March, handily beating the MSCI World index return of 58 per cent by 9 percentage points.

Although definitions can vary, value investing typically refers to the practice of picking stocks deemed to be trading below their “true” actual or potential value.

UBS said its analysis was conducted against a background of expectations for a recovery in global corporate earnings of up to 25 per cent.

“Encouragingly we find a strong correlation between earnings growth and values' outperformance which should auger well for value next year when earnings finally begin to recover,” it said.

“While we strongly advocate value investing as a long-term strategy, our analysis indicates that turning points in the earnings and economic cycles tend to favour value stocks,” UBS said, pointing to a chart showing the US profit cycle.