By Ian Salisbury

Value stocks have been having a good run. For investors in exchange-traded funds, just how good depends on which fund you choose.

With stock market valuations at record highs and uncertainty around the war in Iran, investors have been paying renewed attention to value stocks, usually defined as those with low share prices relative to metrics like earnings or book value.

Plenty of value-oriented funds, including dividend funds, have delivered strong returns recently. But some are doing far better than others. Consider two similarly-named options from the iShares ETF family.

Take a look at the $47 billion iShares S&P 500 Value ETF, which trades under the ticker IVE, and owns more than 400 stocks. It's essentially what index provider S&P Global came up with by splitting the benchmark S&P 500 into value and growth "teams." (The iShares S&P 500 Growth ETF has about 140 stocks; some names are in both funds.)

IVE is having a pretty good year, returning 0.6% in a market where the S&P 500 is down about 1.9%, according to Morningstar. Over the past 12 months, it still lags behind the broad market, however, delivering a 14.9% return compared with more than 20% for S&P 500.

Compare IVE's results to iShares MSCI USA Value Factor ETF, or VLUE. Instead of starting with a broad index and sorting stocks into two groups, this fund targets stocks that show value characteristics relative to industry peers.

The approach leads to a more concentrated portfolio of only about 150 stocks. At the same time, unlike IVE, which dramatically underweights sectors like technology (18% of the fund vs 34% of the S&P 500), VLUE actually holds slightly more tech than the broad market. Tech stocks make up nearly 40% of holdings.

The difference in results is dramatic. VLUE has returned 7% in 2026, and is up 40% in the past 12 months -- double the broad market's gain.

So which fund should investors choose? While opting for better performance may feel like a no-brainer, the answer is not as easy as it looks.

While VLUE appears to have nailed the recent market rotation, a lot of its holdings are not necessarily what investors think of when they think of value. Its top holding, chip maker Micron Technology, is up nearly 340% in the past year. The stock represents 11% of the fund's overall portfolio. Other top holdings Cisco Systems (up 33%), Intel (up 90%), and Applied Materials (up 123%) comprise another 14% of the fund.

For its part, IVE also owns plenty of tech stocks, although these tend to be more staid names like Apple and Amazon. Stocks like Exxon Mobil, Chevron and Procter & Gamble also round out the top 10 holdings.

The bottom line: If you are looking to jump on a near term market rotation into value, VLUE is clearly delivering. But if you are looking for a core holding with a long-term tilt, go with the more staid IVE.

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 17, 2026 15:54 ET (19:54 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.