That flexibility may matter more now. A recent Morningstar analysis found that picking a value ETF is not as simple as choosing one with the right label.
Two of the most widely held passive value funds, the Vanguard Value ETF (VTV) and the State Street SPDR Portfolio S&P 500 Value ETF (SPYV), each returned 11.67% over the 10 years ending in 2025, despite following different index rules that produced very different portfolios along the way, according to Morningstar. For investors who want something not constrained by those rules, TVAL offers an alternative.
Not all passive value ETFs define “value” the same way. The CRSP index that drives VTV draws a hard line between value and growth, building a stable but sometimes slow-moving portfolio. The S&P index behind SPYV moves more quickly, allowing it to pick up stocks that slide from growth into value territory faster. But that can cut both ways, according to Morningstar.
Both approaches rely on predefined formulas — things like price-to-book and earnings-to-price ratios — to screen stocks, according to Morningstar. What ends up in the portfolio is shaped by rules, not individual research.
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How TVAL Builds an Active Value ETF Portfolio
TVAL works differently. Portfolio managers Gabriel Solomon, Donald Peters, and Jodi Love conduct company-by-company fundamental analysis to find businesses that are undervalued, temporarily out of favor, or whose assets are underappreciated, according to T. Rowe Price. The strategy also includes active tax monitoring aimed at improving after-tax returns.
The fund’s top holding is Alphabet Inc. (GOOG) at 4.8%, followed by Micron Technology, Inc. (MU) at 2.5%, according to ETF Database. Advanced Micro Devices, Inc. (AMD) comes in third at 2.4%.
Financials make up the largest sector allocation at 19.4%, followed by industrial and business services at 13.2% and information technology at 13%, as of March 31, according to the fund’s factsheet.
TVAL held $723.8 million in assets and pulled in $39.35 million in net flows over the past month and $118.7 million year-to-date, according to ETF Database. Its expense ratio is a competitive 0.33%, and the fund returned 14.9% year-to-date.
What active management avoids is the kind of portfolio drift that can catch passive investors off guard. In 2023, SPYV counted Microsoft Corp. (MSFT) and Meta Platforms, Inc. (META) among its top holdings, according to Morningstar.
By early 2026, both had exited the top 10, replaced by names like Apple Inc. (AAPL), Costco Wholesale Corp. (COST), and Tesla, Inc. (TSLA). Those shifts happened not because a manager made a deliberate call, but because the index rules changed what qualified, according to Morningstar.
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