Value Stocks Gain Ground As Inflation, Recession Fears Grow: 4 ETFs To Capitalize On The Trend

If you’ve been paying attention to the stock market recently, you must have come across a rather unexpected turn of events—value stocks are taking center stage from their flashy growth rivals. Over the course of three months, the Russell 1000 Value Index has beaten the Russell 1000 Growth Index by a healthy 11%. That’s a far cry from this time last year, when tech and AI plays were driving the market upwards.

Also Read: Growth Or Value? Allspring’s New ETFs Offer Both

With tariffs, geopolitical tensions, and recession jitters swirling, investors are flocking to the relative safety of value stocks. But is it a permanent pivot, or a temporary sidetrack? Although no one knows for sure what the market will do, history suggests that value stocks have a way of surviving rough patches.

For those looking to ride the wave, these four value-based ETFs are worth considering:

iShares Russell 1000 Value ETF (NYSE:IWD)

The first choice for most investors seeking to follow the Russell 1000 Value Index, IWD offers broad exposure to large-cap value stocks from a wide range of sectors, such as financials, healthcare, and consumer staples. Some of its holdings include stocks of JP Morgan Chase & Co (NYSE:JPM), Exxon Mobil Corp. (NYSE:XOM) and Procter & Gamble Company (NYSE:PG). With its size and liquidity, this ETF is a convenient means of achieving diversified exposure to the value sector. It carries an expense ratio of 0.19%.

Vanguard Value ETF (NYSE:VTV)

An affordable fund with a bottom-of-the-barrel expense ratio of 0.04%, VTV tracks the CRSP US Large Cap Value Index. Blue-chip stalwarts such as JPMorgan Chase, and Johnson & Johnson (NYSE:JNJ) are overweights in this fund, which is a good bet for stability and long-term growth.

SPDR S&P 500 Value ETF (NYSE:SPYV)

If you desire exposure to value stocks as part of the larger S&P 500, SPYV may be considered. This ETF targets S&P 500 stocks that reflect strong value features in terms of low price-to-earnings and price-to-book ratios. With the valuation differential between value and growth stocks as high as it is now, this ETF is poised to profit from a possible market correction. The portfolio is similar to that of IWD and VTV, and the expense ratio is 0.04%.

Schwab U.S. Dividend Equity ETF (NYSE:SCHD)

Dividend stocks tend to overlap with value stocks, and SCHD is a good representative of this case. Concentrating on high-grade dividend-paying businesses, this ETF not only gets investors exposed to value stocks but also provides a steady income under market uncertainty. Its portfolio carries blue-chip brands such as Coca-Cola (NYSE:KO), PepsiCo (NASDAQ:PEP), and Pfizer (NYSE:PFE). This ETF comes with an expense ratio of 0.06%.

Also Read: Tariffs, Inflation And Tumbling Markets: These 5 ETFs Thrived Amid Last Week’s Chaos

Why Value Could Stay On Top

Last quarter’s value outperformance is more than just jitters in the market. It’s because, as BlackRock’s Global CIO of Fundamental Equities Tony DeSpirito says, growth stocks now comprise almost 40% of the S&P 500—more than double their long-term average of 24%. With the valuations pulled forward, investors might begin shifting into value stocks for diversification. In addition, sectors like utilities, health care, and materials—staples in value indexes—are less tariff-vulnerable and potentially even positively affected by changes in trade policy.

While growth stocks may recover over time, the current market environment has favored value stocks. For those interested in exploring this trend, these four ETFs offer examples of funds that focus on value investing.

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