azvalor Asset Management is a Madrid deep-value boutique founded in 2015 by Álvaro Guzmán de Lázaro and Fernando Bernad, formerly the core of Bestinver's investment team in the Graham tradition. It is known for contrarian concentration in unloved cyclical assets — gold and silver miners, oil services, uranium — buying into panic and exiting once value is realized. Its flagship international fund is about 70% of firm AUM and has more than tripled since inception a decade ago; letters were quarterly from 2016-2022 and semiannual since 2023.
This letter says markets look pricey and speculative, so index investing needs caution, but it’s a golden age for value investors who buy undervalued companies. The manager’s funds all made money in the first half by selling winners and buying cheaper stocks. Market view: cautious—the S&P 500’s dividend yield is below short-term Treasury yields for the first time in 20 years, meaning stocks’ income appeal has faded. Picks: Yellow Cake (new position, a uranium play), Borr Drilling (new position, offshore drilling), and Noble (best performer in H1). They also sold Tenaris.
Author's market view: the market is not cheap overall, speculation remains rampant, and therefore caution is warranted toward index investing—but this is a "golden age" for deep value investors. [Cautious]
In H1, the flagship funds again delivered double-digit returns and outperformed global indices; the author says the portfolio maintains high upside by selling companies that keep rising and rotating into deeply undervalued names. Original quote: "we at Azvalor sell companies that consistently rise, and reinvest in others that we consider deeply undervalued by the market" (i.e., "At Azvalor, we sell companies that keep rising and reinvest in other companies we believe the market deeply undervalues").
Performance comparison:
| Fund | H1 2026 | Cumulative (since inception) | Current upside potential |
|---|---|---|---|
| Azvalor Iberia FI | +6%, NAV €207.5 | +107.5% | +60% |
| Azvalor Internacional FI | +15% | 3.5x | +82% |
| Azvalor Blue Chips FI | +17.8%, NAV €255.2 | 2.7x | approximately +84% |
| Azvalor Managers FI | +9.3% | +127.2% (more than 7 years since inception) | approximately 45% discount to global equities |
| Azvalor SICAV Luxembourg | Not disclosed | Not disclosed | +82% |
The author argues that the market's encouragement of speculation places value investing in a "golden age": Wall Street profits by steering capital into frequent rotation, not by earning long-term returns for clients. The author lays out Wall Street's "revolving door" path: defense stocks → AI stocks → bitcoin → selling futures to hedge declines, with meme stocks "already up 900%" thrown in. This playbook is clearly good for Wall Street, but whether it is good for investors is far from certain. The author says the amount of money sitting in 3x and 4x leveraged index products is "frankly alarming", advises avoiding them entirely, and notes that many investors ignore the advice—which is precisely what creates opportunity for managers who invest by probability rather than speculating "to the song of Wall Street's sirens." The author also notes that an investor who buys an Azvalor fund and forgets about it would see their money nearly quadruple in ten years, while Wall Street would earn nothing from that trade. Original quote: "we who invest by weighing probabilities, rather than speculating 'to the song of Wall Street's sirens', are living in a 'golden age'" (i.e., "Those of us who invest by weighing probabilities, rather than speculating to the song of Wall Street's sirens, are in a 'golden age'"). The author uses the "golden age" narrative to reinforce his own strategy; readers should note this is the perspective of someone with a position.
The author's second core assessment is that the market as a whole is not cheap: the S&P 500's dividend yield has fallen below the short-term Treasury yield for the first time in 20 years, and the index has doubled since October 2020 while earnings have risen only 30%. The author argues this underscores that investors should remain cautious about index investing. Stance: [Cautious].
As of H1, Azvalor manages approximately €4.8 billion, with net inflows of €460 million during the period and more than 8,900 new co-investors, bringing the total to 39,000. The author says these figures are the result of doing the job well over the past decade-plus, not goals in themselves; the team continues to expand and deepen its industry and geographic knowledge, allowing the firm to analyze more companies in a more rigorous way—which the author considers the best news for future returns, more important than any single-period performance. The goal remains to continue outperforming the market with lower risk than the equity market as a whole.
After rising 31% in 2025, Azvalor Iberia FI gained another 6% in H1 2026, bringing NAV to €207.5 and cumulative return since inception to +107.5%. Positive contributions in H1 came mainly from Meliá (action not specified; the original text identifies it as a major positive contributor) and Repsol (action not specified; same). During the period, four relatively new ideas were added: following the Azvalor method, investments that have reached the harvesting stage were gradually sold or reduced, replaced with new names offering attractive upside; the author says this accelerated the fund's H1 appreciation, with current upside potential around +60%.
After rising 19.5% in 2025, Azvalor Internacional FI gained another 15% in H1 2026, with its unit NAV exceeding €600 for the first time in history and principal growing 3.5x since inception. During the period, more than ten substantial new holding ideas were added; the author describes these companies as well managed, profitable, and attractively priced, spanning different industries with no common theme. Current upside potential is +82%; the author says the past two years have built the strongest "bench" of idea reserves in its history, allowing the portfolio to keep replenishing upside even at elevated levels.
Azvalor Blue Chips FI rose 17.8% in H1, with NAV reaching €255.2 and principal growing 2.7x since inception. The fund invests in large-cap companies, but its roughly €120 million size retains the advantages of a small portfolio: it is more concentrated than Internacional and more agile in buying and selling during periods of high volatility. Current upside potential is approximately +84%.
Azvalor Managers FI returned +9.3% in H1 and +127.2% cumulative over more than seven years since inception; it has over €250 million in assets and more than 2,700 investors, with a Morningstar five-star rating and Citywire 'Rating +'. The valuation is at a discount of approximately 45% to global equity markets; the portfolio spans all continents, and the selected companies are run by what the author considers "the world's best managers", with nearly 70% of positions in small/mid caps and 35% allocated to emerging markets (including China).
Aimed at international investors, the Azvalor SICAV Luxembourg strategy is similar to the other funds: it holds names from Azvalor Internacional and selectively picks ideas from Azvalor Iberia. At period end, the portfolio had an average free cash flow yield of 12% and a weighted average ROCE of 20%, with upside potential of +82%. The main new positions during the period were Yellow Cake (new position; price and weight not disclosed) and Borr Drilling (new position; price and weight not disclosed); Tenaris was sold (sell; the original text does not specify whether the position was fully liquidated, and this was not the only sale). Noble was the best-performing name in H1 (action not specified).
The firm won the 2025 Expansión-Allfunds Fund Award for Best Domestic Independent Asset Manager for the fourth consecutive year, and the author believes this reflects the consistency of a long-term working approach, not performance in any single period. The award news was announced in May; the letter notes that winning for four consecutive years demonstrates not just a one-off strong result, but the track record accumulated since the company's founding, along with the team and management model — the high expectation standards underpinning this consistency have spanned more than 25 years. The company also mentioned that, from June, the FY2025 annual report has been available for review, covering the annual fiduciary responsibility report and a full picture of the company's actions over the past year. Its self-identified "true competitive advantage" is the "Azvalor Method" plus a culture of continuous training, diligence, meritocracy, and the pursuit of excellence. The author uses the awards and the annual report to argue for the consistency of its methods; readers should note that this is a self-affirmation from the company's perspective.
The institution judges that the current frenzy over certain growth narratives and the pattern of returns concentrated in a handful of companies is not a new phenomenon; on every previous occasion of a similar situation, the market corrected valuation excesses and recognized quality companies at low valuations. The letter reiterates three principles: look where others are not looking; remain patient while waiting for the market to acknowledge the value of the companies in the portfolio; and do not be swept along by transient mainstream narratives. The author's original words: "On every previous occasion, the market corrected valuation excess wherever it existed, recognising the value of sound businesses trading at unjustifiably low prices" — that is: "In every previous instance, wherever valuation excess existed, the market corrected it and recognized the value of quality businesses trading at unjustifiably low prices." This 【optimistic ~ cautious】stance is consistent with its long-standing value investing framework, though the author does not provide a specific timing for the market correction.
The author approaches the future with prudence, enthusiasm, and humility: acknowledging that investment processes inevitably involve mistakes and difficult periods, while at the same time emphasizing that the team is larger, more experienced, and better trained than ever. The reason for prudence is that the author soberly recognizes: "No investment process, however rigorous, is free from mistakes or difficult periods" — that is: "No investment process, no matter how rigorous, can be free from mistakes or difficult periods." The enthusiasm comes from the team's deeper training in the "Azvalor Method" and a broader capacity for opportunity analysis; the humility is attributed to the fact that the results achieved so far have been possible only thanks to the trust and patience of co-investors — who remained steadfast during the most uncertain periods. The letter closes by reaffirming the goal set on the first day of the firm's founding — to provide the best haven for your savings and our savings; this is a vision statement from the perspective of the position-holder, not an investment commitment.
| Position | Direction | Author's One-Sentence Stance | Key Data |
|---|---|---|---|
| Azvalor Iberia FI | Not disclosed | The author, by gradually selling matured investments and switching into new names, says the fund's value growth has accelerated. | 2026H1 +6% (2025 +31%); NAV €207.5; cumulative +107.5% since inception; current upside potential ~+60% |
| Azvalor Internacional FI | Not disclosed | The author says that over the past two years they have built the strongest "bench" in history, still able to add upside even at elevated levels. | 2026H1 +15% (2025 +19.5%); NAV breaks €600 for the first time; 3.5x principal since inception; current upside potential +82%; more than 10 new position ideas added during the period |
| Azvalor Blue Chips FI | Not disclosed | The author believes the advantages of a small portfolio make it more concentrated than Internacional and more agile during periods of high volatility. | 2026H1 +17.8%; NAV €255.2; 2.7x principal since inception; AUM ~€120 million; current upside potential ~+84% |
| Azvalor Managers FI | Not disclosed | The author believes the investee companies are run by the best managers globally, and the portfolio trades at a significant discount. | 2026H1 +9.3%; cumulative +127.2% over more than 7 years since inception; AUM over €250 million; ~45% discount to global equities; nearly 70% small/mid-cap, 35% emerging markets (including China) |
| Azvalor SICAV Luxembourg | Not disclosed | The author continues the combined logic of Internacional + Iberia, targeting international investors. | 2026H1 not disclosed; average FCF yield 12%; weighted average ROCE 20%; upside potential +82% |
| Yellow Cake | New position | Selected as a major new position for the SICAV; the author did not elaborate a view on the individual name. | New position; price and position size not disclosed |
| Borr Drilling | New position | Selected as a major new position for the SICAV; the author did not elaborate a view on the individual name. | New position; price and position size not disclosed |
| Tenaris | Reduced | Sold by the SICAV; the original text does not specify whether it was a full exit. | This was not the only sale |
| Noble | Not disclosed | The author regards it as the best-performing position in H1; the action is not disclosed. | Best performer; no specific gain data |
| Meliá | Not disclosed | The author regards it as a main positive contributor to Iberia in H1. | Main positive contributor; no specific return figure |
| Repsol | Not disclosed | The author regards it as a main positive contributor to Iberia in H1. | Main positive contributor; no specific return figure |
| S&P 500 | Not disclosed | The author believes the overall market is not cheap, and index investors should be wary. | Dividend yield fell below short-term Treasury yields for the first time in 20 years; the index has doubled since October 2020 while earnings have risen only 30% |
| Short-term Treasuries | Not disclosed | The author uses its yield as evidence that the stock market is not cheap. | Yield has exceeded the S&P 500 dividend yield for the first time in 20 years |
| Defense stocks/AI stocks | Not disclosed | The author views them as a speculative stage in Wall Street's revolving door. | Revolving-door starting point: defense stocks → AI stocks → Bitcoin → selling futures to hedge declines |
| Bitcoin | Not disclosed | The author places it in Wall Street's speculative revolving door and does not endorse it. | It sits in the middle of the revolving-door chain |
| Futures (hedging declines) | Short | The author views it as a tool Wall Street uses to hedge declines, not value investing. | Selling futures to hedge declines |
| Meme stocks | Not disclosed | The author warns this is a speculative narrative and should not be followed. | Described as a meme stock that "has risen 900%" |