Given the uncertainty of the current macroeconomic environment, value investors want to know: how should we be navigating the market this year?
As part of the BNY Investments Market Pulse Series, Brian Ferguson, Senior Portfolio Manager at BNY Investments Newton, recently examined the state of play for value investors in 2026, evaluating both the present risks and opportunities within the value space.
For key headwinds, Ferguson highlighted AI over-exuberance leading to stretched valuations for many companies tied to the theme. Additionally, he noted that uncertain monetary policy remains a risk. This is particularly true if markets get far ahead of how the Fed ends up tackling the problem of inflation.
“Concentration risk is also on our minds, not just at the index level, but at the client portfolio level, as many growth-oriented companies are now finding their way into value oriented benchmarks,” Ferguson added.
That being said, investors can still take advantage of federal fiscal policy. In particular, Ferguson highlighted how ongoing fiscal policy from the federal government is incentivizing corporations to expand domestic operations and manufacturing, which can be a tailwind for some value-oriented sectors.
Fiscal policy isn’t the only tailwind working in favor of value investors. Ferguson cited deregulation as a potential catalyst for productivity, noting how the financial sector has already shown signs of benefitting. And while AI over-exuberance is certainly a risk, Ferguson did call out that broadening AI adoption might create new opportunities beyond the usual AI stocks investors are used to seeing.
BKDV: The BNY Investments Approach to Value Investing
These opportunities could work favorably for the BNY Mellon Dynamic Value ETF (BKDV), of which Ferguson is a portfolio manager. BKDV is an actively managed fund that looks to locate value stocks with robust fundamentals and strong, ongoing momentum.
“Given the risks and potential opportunities, you can expect us to continue to take a balanced approach within the portfolio by focusing on minimizing macro risk while emphasizing idiosyncratic opportunities,” noted Ferguson.
BKDV’s active, disciplined approach to value investing is already showcasing its merits with compelling results. As of February 28th, 2026, the fund’s NAV has risen 19.21% over the last twelve months.
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