Structural Shift or Recency Bias? Decoding Value’s Mixed Signals in 2026

Value investors may be facing a conviction crisis. Despite leading in performance so far in 2026, value ETFs have struggled to consistently gather assets, with some funds picking up significant net new money while others are bleeding just as much.

Consider that the Vanguard Value ETF (VTV) has taken in $2.5 billion in net new money this year. Other popular value ETFs this year include PVAL, which has seen $2.7 billion in inflows. AVUV has picked up $2.3 billion. DFIV has taken in $1.7 billion, while JIVE and AVLV have each seen $1 billion in net creations in 2026. VALQ has seen $20 million in net new money. The list goes on.

The flip side is equally populated. IWD has now bled $2.3 billion in net assets year-to-date. IVE is out $1.1 billion. SCHV has seen $375 million in net outflows. ASLV has lost $61 million while NULV has faced $46 million in net redemptions. The list — also — goes on.

Is this mixed trend in investor demand a compelling investment case battling it out with recency bias and near-term market momentum benefiting growth-oriented opportunities? Value is still edging out growth in 2026, but its early-year strong performance relative to growth has waned dramatically in the past month.

See related: Finding the Value Sweet Spot in 2026

Using the Vanguard Value ETF (VTV) vs. the Vanguard Growth ETF (VUG) as proxies for the U.S. large cap value vs. growth argument, we see that momentum change:

Source: PortfolioLab

Structural Shift vs. Recency Bias

Coming into the year, there was a consensus around the opportunity in value. Market outlooks across asset management firms called out value’s time as a capital appreciation play, a concentration risk mitigator, and a key diversifier.

Midway through the first quarter, J.P Morgan, as an example, argued that “cyclical, structural, and secular stars are aligning for value stocks.” They made the point that value’s moment to shine wasn’t merely a case of growth’s correction mode, but a much more profound shift in market opportunity.

As the firm saw it, cyclical support came from fiscal easing and strong economic momentum; secular support stemmed from a broadening AI play that now reached industrials and materials sectors. And, finally, structural support came from business-friendly policy. A look at change in the S&P 500’s sector leadership this year reflects that.

Source: State Street Investment Management

Changing Tide? 

Many of these conditions haven’t exactly changed, but geopolitical uncertainty centered on the Iran conflict, and prospects for stickier inflation and possibly flat-to-higher — not lower — rates ahead have dampened value’s compelling case. The early-year reset among growth’s biggest names also took away some of value’s valuation edge relative to growth.

So far in the second quarter, value has struggled to keep up with growth’s renewed momentum.

VTV vs VUG vs VOO

Up Next: Eyes on Earnings

The ongoing earnings season could be the next mile marker in the value vs growth story this year. Value’s diversifying proposition remains strong, especially in the face of a concentrated market tilting heavily to tech and growth, but investors will be looking for clues on where opportunity lies in the near term. Results will carry a lot of weight.

Coming today (April 29) are some of the most anticipated results in this earnings season from several of the growth-tech darlings. Microsoft, Meta, Alphabet, and Amazon are all reporting results today. Apple comes on Thursday. Many investors are walking into these results bullish on the growth-tech trade.

Results will carry a lot of weight into what happens next. We know that macro conditions remain challenging; the Iran conflict is persisting; consumer confidence is forging new lows; and fears of inflation and market weakness remain very real.

ETF asset flows confirm fresh appetite for growth ETFs in the second quarter. But they also show some emerging new green shoots of demand for value as investors are reminded of the importance of diversification in the current market.

These are interesting times to be a value investor.

VTV vs VUG vs VOO – Sector View

Source: VettaFi