Don’t look now, but markets may be poised for a value rotation. Each year, market uncertainty sees headlines and narratives about a potential value rotation grow. While in past years such concerns were overruled by strong growth performance, 2025 has potentially even more significant risks to growth activity looming. Value ETF approaches can help diversify portfolios and capture upside if markets do shift that way.
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A value ETF duo like FVAL and FIVA, for example, could prove to be useful tools if a value rotation takes off. The Fidelity Value Factor ETF (FVAL) and the Fidelity International Value Factor ETF (FIVA) offer investors low cost approaches to the value theme.
That could count in 2026 amid a myriad of potential risks. A.I.-reliant tech firms must eventually deliver on their sky high valuations, or markets’ significant concentration risk and exposure to those companies will come back to haunt investors. Stubborn inflation and further tariff risks, too, continue to loom.
Value ETF Investing Ahead of 2026
Value investing provides an important set of alternative opportunities. By leaning on traditional value characteristics, ETFs like FVAL and FIVA can find companies underrated by investors that may be able to shine even amid broader headwinds.
FVAL charges just 15 basis points (bps) to track the Fidelity U.S. Value Factor Index. The value ETF provides a tight focus on value stocks. Relying on the firm’s rules-based proprietary index methodology, it ranks stocks within each sector by value measures like free-cash-flow yield, price to book value, and more. That has helped FVAL return 13.1% over the last one year on a NAV basis, per Fidelity Investments data as of November 30.
FIVA, meanwhile, offers an international value ETF approach. The strategy asks 19 bps from its investors to track the Fidelity International Value Index. It looks for midcap and large-cap companies displaying value metrics outside the U.S. It has returned a strong 34.4% over the last year as of November 30. That speaks once more to the strong performance of foreign equities in 2025.
Those two value ETF strategies present strong options for investors looking at a potential value rotation. With 2026 around the corner, now may be the time to consider a swap to value.
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
