Value investment has proven to be one of the most successful investment strategies in the long term. Many of the world’s top investors, including the legendary Warren Buffett, use a valuable approach to generate outstanding returns over time.
However, in recent years, value stocks have driven out growth stocks significantly as low interest rates drive valuations of rapidly growing companies. From 2011 to 2020, Morningstar said the large value fund reduced its massive growth funds by more than 5% points each year. In 2020, the gap was an astounding 32.2%.
The value exceeded in 2022, with the Russell 1000 value index down about 7.5% compared to a 29% or more decrease in the Russell 1000 growth index. However, that trend reversed in 2023, with the value index increasing by about 11.5% compared to an approximately 42.7% increase in the growth index. This trend continued in 2024, with the growth index returning 33.4% and the value index at 14.4%.
Below are some of the best value ETFs to consider in your portfolio. (Data from June 4th, 2025.)
Top Value ETF
Vanguard Value ETF (VTV)
The Vanguard Value ETF is trying to track the performance of the CRSP US Large Cap Value Index. The fund holds approximately 330 different stocks.
- 5-year return (annual): 13.32%
- Cost Ratio: 0.04%
- Managed assets: $183.6 billion
- Top Holdings: Berkshire Hathaway (BRK.B), JPMorgan Chase (JPM), Exxon Mobil (XOM), Walmart (WMT)
- Dividend Yield: 2.29%
iShares Russell 1000 Value ETF (IWD)
This ETF is trying to track the performance of a Russell 1000 value index. The fund is exposed to investors to companies that are considered undervalued compared to their comparable companies.
- 5-year return (annual): 12.12%
- Cost Ratio: 0.19%
- Managed assets: $60.8 billion
- Top Holdings: Berkshire Hathaway (BRK.B), JPMorgan Chase (JPM), Exxon Mobil (XOM), Walmart (WMT)
- Dividend Yield: 1.86%
Vanguard Small-Cap Value ETF (VBR)
The Vanguard Small-Cap Value ETF is trying to track the performance of the CRSP US Small Cap Value Index, which measures small-cap returns. The fund holds over 800 shares and holds 6% of the assets of the top 10 assets held.
- 5-year return (annual): 13.64%
- Cost Ratio: 0.07%
- Managed assets: $51.7 billion
- Top Holdings: Atmos Energy (ATO), Smurfit Westrock (SW), NRG Energy (NRG), Williams-Sonoma (WSM)
- Dividend Yield: 2.23%
Vanguard Mid-Cap Value ETF (VOE)
This ETF is trying to track the performance of the CRSP US Mid Cap Value Index. Fund holdings generally lie between small caps and large stocks. The ETF holds approximately 190 shares, with 12% of the fund investing in the top 10 holdings.
- 5-year return (annual): 12.63%
- Cost Ratio: 0.07%
- Managed assets: $29.1 billion
- Top Holdings: Arthur J. Gallagher & Co (AJG), CRH PLC (CRH), Newmont Corp (NEM), Digital Realty Trust (DLR)
- Dividend Yield: 2.31%
Fidelity High Dividend ETF (FDVV)
Fidelity High Dividend ETFs invest in inventory from large and intermediate companies that are expected to pay and grow dividends for the future. The fund holds approximately 100 shares, and holds approximately 30% of the assets of its top 10 assets held.
- 5-year return (annual): 16.61%
- Cost Ratio: 0.16%
- Managed assets: $5.3 billion
- Top Holdings: Microsoft (MSFT), Apple (AAPL), NVIDIA (NVDA), JPMorgan Chase (JPM)
- Dividend Yield: 3.02%
SPDR Russell 1000 Yield Focus ETF (ONEY)
This ETF is trying to provide investment results that track the performance of factor indexes, which generally focuses on the yield of the Russell 1000. The fund hopes to collect above-average dividend payments to increase its total revenue.
- 5-year return (annual): 15.48%
- Cost Ratio: 0.20%
- Managed assets: $831.1 million
- Top Holdings: Bristol Myers Squibb (BMY), Gilead Science (Guild), Altria Group (MO), Cardiac Health (CAH)
- Dividend Yield: 3.23%
What is value investment?
Value investment means different things for different people. In a broad sense, it’s an act of getting more than you pay with an investment. Of course, growth is an important factor in the value of a company for shareholders, and growing companies can certainly represent good value depending on the price they can buy.
The world of professional investment divides the fund universe into various categories such as value and growth funds. This segmentation requires a more quantitative definition of value and growth. Value funds tend to own companies with lower price-to-price-to-revenue ratios than funds from a wide range of indexes. They also tend to reduce higher dividend yields and expected future revenue growth.
Conclusion
Investing in value ETFs is an easy way to invest in stocks that are considered undervalued in the market. By owning a basket of these stocks via ETFs, you can avoid the heavy research required to buy individual stocks. You can also benefit from diversification by owning stocks in various industries that typically trade below average revenue and assets.
– Bank Rate Logan Jacoby I contributed to updating this article.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Furthermore, investors recommend that past investment products performance is not a guarantee of future price increases.