Value investing spent most of the post-2010 cycle losing to growth, but the past year has flipped that script. Three exchange-traded funds (ETFs) in particular have outpaced the broad market so far in 2026, and each does it through a completely different value playbook: Avantis U.S. Large Cap Value ETF (NYSEARCA: AVLV), Avantis U.S. Small Cap Value ETF (NYSEARCA: AVUV), and Schwab Fundamental U.S. Large Company ETF (NYSEARCA: FNDX).
The differences in their strategies matter more than just the headline returns. One fund runs an active large-cap screen that filters value traps using profitability. Another digs into deep-value small caps where mispricings live but volatility bites. The third throws out market-cap weighting entirely and ranks companies by economic footprint. Same destination, three very different roads, and all three have rewarded patience.
Why Value Is Working Again
Higher-for-longer rates, narrower mega-cap leadership rotating out, and a renewed market appetite for cash-generative businesses have given the value factor real lift. The funds below each beat the S&P 500 on a year-to-date and trailing one-year basis, though shorter windows have been noisier and the index has occasionally pulled ahead over the trailing month. The following sections should be read as a methodology comparison.
AVLV: Large-Cap Value With a Quality Filter
This fund has the cleanest entry point for investors who want value without the historical drawbacks of traditional value investing. The classic problem with value screens is the value trap: a stock looks cheap because the business is dying. Avantis addresses that directly by layering a profitability screen on top of the valuation screen, so a stock has to look inexpensive and generate respectable returns on assets to earn weight in the portfolio.
That methodology is showing up in results. AVLV is up 19.7% year to date and has gained 38.0% over the past year; it most recently closed at $91.39. Over a five-year stretch, the fund has almost doubled, the kind of compounding most investors seek from a core holding rather than a satellite bet.
The tradeoff with active factor tilts is that you sacrifice the rock-bottom expense ratio of a plain vanilla value index fund. For the cost difference, you get a portfolio that looks meaningfully different from cap-weighted value benchmarks, with less exposure to the lowest-quality cheap stocks. For most investors who want one large-cap value holding, the Avantis large-cap value fund is the strongest choice among the three funds reviewed here.
AVUV: The Deep Value, Small-Cap Contrarian
This fund is the contrarian sleeve. Small-cap value has historically delivered the largest premium of any equity factor, as well as the worst behavior, often underperforming for years before snapping back. The Avantis approach applies the same profitability overlay used in its large-cap counterpart but in a corner of the market where the academic value premium is theoretically strongest and business quality varies most widely.
The holdings tell the story. AVUV currently holds more than 500 positions, with the largest weights in names like Viasat (the only holding above 1%), Matson, and Lear. No single stock dominates, which matters when individual small caps can swing 20% on a single earnings report. The sector mix leans into regional banks, energy services, industrials, and beaten-down consumer discretionary names, the parts of the market that value screens flag as cheap and that cap-weighted indexes barely touch.
Returns have rewarded the conviction. The fund is up 18.0% year to date and 37.1% over the past 12 months, with shares closing at $121.45. The 10-year track record from inception shows shares have gained 142.3%, a result that has established the fund’s reputation as the leading small-cap value ETF.
The tradeoff is significant. Small-cap value experiences drawdowns that large-cap value rarely sees, and the concentration in cyclical sectors like energy and regional banking means recession-sensitive shocks hit harder. The Avantis small-cap value fund is best suited for a portfolio you can leave alone for a decade.
FNDX: Fundamental Weighting Instead of Cap Weighting
This is the option for investors who do not want a pure value screen but do want to break the grip of mega-cap concentration on their portfolio. The fund tracks the Russell RAFI US Large Company Index, which weights companies by economic measures: sales, retained cash flow, and capital returned to shareholders through dividends and buybacks. Bigger businesses by economic footprint get bigger weights, regardless of how the market prices them.
The practical effect is a structural value tilt without an explicit value mandate. When a stock runs up faster than its fundamentals, the fund trims it at rebalance. When a stock falls faster than its earnings, the fund adds. That mechanical rebalancing into out-of-favor names is where the value premium quietly enters the portfolio.
Performance has been steady rather than spectacular. Trading at $31.26, the fund is up 14.1% year to date and 31.5% over the past year. Over 10 years, the fund has returned 210.3%, reflecting both the prolonged bull market in U.S. equities and the durability of the fundamental weighting approach.
The tradeoff here is that the fund is closer to a broad U.S. large-cap fund than a deep value play. It is unlikely to dramatically outperform when value is roaring, as well as unlikely to dramatically lag when growth is leading. That makes it a sensible swap for a core S&P 500 position rather than a satellite bet.
Picking the Right Tool
These three funds complement each other rather than compete. An investor who wants a single value holding and a smoother ride may find AVLV the most natural anchor. The profitability screen does the work of weeding out the cheap-for-a-reason stocks that drag down generic value indexes.
An investor who already owns broad U.S. equity exposure and wants to add a higher-conviction tilt with genuine factor purity should consider AVUV, sized appropriately for its volatility. A 5% to 10% position in a small-cap value sleeve is a different decision than making it half the portfolio.
And FNDX fits the investor who wants something that behaves like a U.S. large-cap fund but breaks the link to cap-weighted concentration. It is the least aggressive value expression of the three and the easiest to hold as a core position. Pairing FNDX as the core holding with a smaller AVUV allocation is one of the more effective ways to build a value-tilted portfolio without abandoning broad market exposure.
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