Value style exchange traded funds held up Tuesday as U.S. markets markets pared early gains after manufacturing data revealed an ongoing expansion amid rising commodity prices and supply side hiccups.

The Institute for Supply Management (ISM) revealed that U.S. manufacturing activity rose up May as its index of national factory activity advanced to 61.2 last month from 60.7 in April, Reuters reports.

The improved manufacturing data was attributed to pent-up demand amid the reopening economy, but a backlog of unfinished work has increased due to shortages of raw materials and labor.

“Markets are letting the macroeconomic data lead the way with Treasury prices lower and yields higher after strong numbers this morning,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, adding that updates on oil supplies rapidly drawing down, which will lead to higher oil prices, has also acted as a catalyst.

“They are interpreting higher yields as a signal to sell technology holdings and buy cyclical companies in the Energy, Materials and Financials sector, which is what they’ve done so far today,” Zaccarelli added.

Markets continue to juggle concerns over inflationary pressures, which have weighed on equities through May.

“The market is relatively sanguine about the inflationary pressure building,” Brian O’Reilly, head of market strategy for Mediolanum International Funds, told the Wall Street Journal. “It is still a liquidity-driven equity market that is brushing off any bit of bad news.”

Investors who are interested in a targeted approach to the value segment can look to the American Century STOXX U.S. Quality Value ETF (NYSEArca: VALQ). VALQ’s stock selection process includes a value score based on value, earnings yield, and cash flow yield, along with a sustainable income score based on dividend yield, dividend growth, and dividend coverage.

The American Century Focused Large Cap Value ETF (FLV) tries to achieve long-term returns through an investment process that seeks to identify value and minimize volatility. FLV holdings and value stocks usually trade at lower prices relative to fundamental measures of value, like earnings and the book value of assets.

Lastly, the Avantis U.S. Small Cap Value ETF (AVUV), an actively managed ETF, seeks long-term capital appreciation. The fund invests primarily in U.S. small cap companies and is designed to increase expected returns by focusing on firms trading at what are believed to be low valuations with higher profitability ratios.

For more news, information, and strategy, visit the Core Strategies Channel.