Key Takeaways
- Value firms may offer more durability and returns over time in a volatile near- to medium-term outlook.
- Looking to value as a screen for international equities in particular may outdo market cap-weighted approaches
- A value spin on broad international equities may provide longer term gains
International equities have been a star segment so far in 2026. They started off with record flows in January as investors continued to look for diversification opportunities away from a highly concentrated U.S. stock market. Rising global geopolitical volatility may have implications for foreign equities, but it also affects U.S. equities, making diversification an important task even still.
See more: Will Materials Stocks Repeat Their Strong 2025 in 2026?
Finding the right international equities ETF, then, becomes a critical task. A value approach therein via a fund like the Fidelity International Value Factor ETF (FIVA) can help. FIVA charges an 18-basis-point fee for investing in international value stocks. It targets mid- and large-cap names within that space, specifically tracking the Fidelity® International Value Factor Index.
FIVA provides a more targeted, 100-stock list within that space. It has taken that approach and returned 28.6% over the last twelve months, according to ETF Database data. That outperformed the ETF Database foreign large-cap equities ETF category average in that time, as well.
By targeting value firms, investors may be able to find companies with a bit more durability. Value screens often emphasize companies with attractive baseline metrics relative to their valuations, such as cash flows and earnings. Especially as many investors already have some international equities exposure, a value version of those exposures may add potential performance upside to portfolios.
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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.
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