As of market close on Feb. 17, the S&P 500 is flat on the year. At first glance, you may think that stocks are going nowhere, but that couldn't be further from the truth.
Mega cap growth stocks have been falling, while plenty of other stocks are soaring -- especially in sectors that don't make up a large share of the index -- like consumer staples, energy, industrials, and materials. In fact, if you were to weight each component in the S&P 500 evenly instead of by market capitalization, the index is actually up 5.5% year to date.
Here are three value-focused exchange-traded funds (ETFs) that are crushing the S&P 500 in 2026 but are still buys now.
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1. Vanguard Value ETF
With a staggering $227 billion in net assets, the Vanguard Value ETF (VTV 1.20%) is the largest value-focused ETF in the world -- more than four times larger than the iShares S&P 500 Value ETF. The fund's size allows investment management firm Vanguard to charge a mere 0.03% expense ratio, or just $3 for every $10,000 invested.
Unlike the S&P 500 or the Nasdaq Composite, the fund's largest holdings aren't mega-cap tech stocks like Nvidia or Apple. Rather, the fund is heavily concentrated in financials, industrials, and healthcare, which make up 53.1% of the ETF.
Top holdings include financial behemoths JPMorgan Chase and Berkshire Hathaway, oil and gas giant ExxonMobil, healthcare leader Johnson & Johnson, and recent $1 trillion club member -- Walmart. These companies may lack the glitz and glam of high-octane artificial intelligence (AI) growth stocks, but they have track records of rewarding patient shareholders with steady returns. And many holdings in the ETF pay stable, growing dividends, which is why the Vanguard Value ETF yields 2% compared to just 1.2% for the S&P 500.
Given the recent run-up, the Vanguard Value ETF isn't as cheap as it used to be, but it still trades at a discount to the S&P 500, with a 21.7 price-to-earnings (P/E) ratio compared to 27.5 for the Vanguard S&P 500 ETF.
NYSEMKT: VTV
Key Data Points
2. Vanguard Mega Cap Value ETF
The Vanguard Mega Cap Value ETF (MGV 1.13%) is a more concentrated version of the Value ETF with a slightly higher expense ratio of 0.05%.It features 123 holdings compared to 312 for the Value ETF.
Both funds have very similar holdings, but the Mega Cap Value ETF assigns higher weightings to the largest names. For example, it has 16.1% invested in its top five holdings -- JPMorgan Chase, Berkshire Hathaway, ExxonMobil, Johnson & Johnson, and Walmart -- compared to 13.1% for the same five holdings in the Vanguard Value ETF.
The Mega Cap Value ETF is a superior choice for investors who want more exposure to industry-leading value stocks, rather than spreading out the portfolio across more names.
Over the last five years, the Mega Cap Value ETF has slightly outperformed the Value ETF with a 89.1% total return compared to 85.5%. But the difference is relatively small, so the choice should come down to which ETF aligns better with your interests and existing holdings.
3. Vanguard High Dividend Yield ETF
As good as the Vanguard Value ETF and Mega Cap Value ETF have performed in 2026, the Vanguard High Dividend Yield ETF (VYM 1.03%) is slightly better -- up 8.1% year to date.
With 562 holdings and a 0.04% expense ratio, the ETF generally focuses on companies with growing dividends. However, there are a few nuances.
For example, the fund's largest holding is Broadcom, which was once viewed more as a value stock before its AI semiconductor business took off. However, Broadcom does have an exceptional 15-year track record of massive dividend increases. But with a yield of 0.8%, the stock isn't "high yield" as the ETF's name would imply. Walmart is in a similar boat -- with 52 consecutive years of boosting its payout but a mere 0.7% yield simply because the stock has done so well.
Instead of selling top-performing stocks just because they have gone up and no longer offer high yields, the fund tends to hold industry leaders. This is exactly the kind of approach long-term investors look for.
Besides Broadcom, the Vanguard High Dividend yield ETF shares many similarities with the Value ETF and the Mega Cap Value ETF. Despite being slightly more concentrated in low-yield sectors like technology and consumer discretionary, the ETF sports a slightly higher yield of 2.3% with a similar valuation to the other two ETFs.
Broad-based exposure to top value stocks
The Vanguard Value ETF, Mega Cap Value ETF, and High Dividend Yield ETF are very similar. And for most investors, it's probably a toss-up for which fund is the best buy now. However, when choosing an ETF to buy and hold for the long term, it's worth pausing to ensure you are making the best decision possible.
The Vanguard Value ETF is the best buy for investors seeking greater diversification, while the Mega Cap Value ETF is the best bet for greater concentration in the largest value stocks.
Meanwhile, the Vanguard High Dividend Yield ETF includes some lower-quality value stocks with higher yields, but it also has a 7% weighting in Broadcom -- which is a unique growth stock kicker for an otherwise value-focused fund. So if you want some exposure to AI while generating passive income, the Vanguard High Dividend Yield ETF is the fund for you.
