When an investor says they’re buying a “Value” ETF, what do they really mean? The label implies a portfolio of underpriced stocks, but the simplicity of the name hides a world of complexity. The truth is, there are many ways to define value, and not all Value ETFs are created equal. Each fund manager has their own unique recipe—their own “Factor Flavor.”
Today, we’re putting four U.S. Large Cap Value ETFs under the microscope to see what makes them tick. We’ll explore how their different methodologies lead to unique portfolios, risk profiles, and performance patterns. The funds in our taste test are:
- IVE – iShares S&P 500 Value ETF
- VLUE – iShares MSCI USA Value Factor ETF
- DFLV – Dimensional US Large Cap Value ETF
- JAVA – JPMorgan Active Value ETF
The Performance Story: A Tale of Different Markets
A quick look at performance shows these funds march to the beat of different drums. Performance isn’t just about the highest number; it’s about how a fund behaves in different environments.
The 2022 market downturn provides a perfect example. While the S&P 500 (SPY) fell a painful 18.14%, the value factor held up far better. But even within the value camp, the flavors differed. DFLV and IVE were the strongest defenders, falling only 0.31% and 0.78%, respectively. They provided excellent protection in the storm. However, when the market rallied in 2023, the roles reversed. The more defensive funds lagged, while the actively managed JAVA led the value pack with a respectable 15.51% gain. Then in 2024, VLUE took the lead, outperforming not only its value peers but the S&P 500 as well. This shows that the right flavor of value depends heavily on the market climate.
Under the Hood: Deconstructing the Recipes
Let’s look at what drives this performance divergence. Each fund’s unique construction gives it a distinct personality.
IVE – The Classic Benchmark 🏛️
As the oldest and largest fund in the group, IVE is the traditionalist. It passively tracks the S&P 500 Value Index, giving you a broad, straightforward slice of the value market.
- The Recipe: Its portfolio has the highest allocation to large-cap stocks (73.1%) and the most overlap with the S&P 500 (63%). This makes it a benchmark-aware choice.
- Risk Profile: Over the last three years, it has captured more of the market’s upside (89.20%) than its peers but has offered less downside protection, capturing 102% of market losses.
- Flavor Profile: This is a good choice for investors who want a core, no-surprises value holding that closely reflects its benchmark index.
VLUE – The Deep Value Quant 🔬
VLUE takes a more extreme, quantitative approach. It doesn’t just buy stocks that look a little cheap; it hunts for deep value using a strict, rules-based screening process.
- The Recipe: Its methodology focuses on three key metrics: price-to-book, price-to-forward earnings, and enterprise value-to-cash flow. This results in a portfolio that looks nothing like the broader market, with a mere
- 13% overlap with the S&P 500. It also has a massive tilt towardmid-cap stocks (51.7%).
- Fundamental DNA: This is the “cheapest” fund in the group by a wide margin, boasting the lowest Price/Earnings (15.86) and Price/Book (1.76) ratios.
- Flavor Profile: This is a concentrated, high-conviction flavor for investors who believe a strict, quantitative screen is the best way to find truly undervalued companies.
DFLV – The Defensive Profitability Purist 🛡️
DFLV is an actively managed fund with a unique twist: it combines value with a strong emphasis on profitability and defense.
- The Recipe: The managers at Dimensional look for stocks with low prices relative to their book value but also add a crucial second layer, overweighting companies with higher profitability.
- Risk Profile: This quality screen shines through in its risk metrics. Over the past three years, it has the lowest beta (0.65) and the best downside capture ratio (92.95%), meaning it has been the best at protecting capital in down markets. Its portfolio also carries the lowest level of long-term debt.
- Flavor Profile: This is the perfect flavor for a risk-averse investor who wants value exposure but with a seatbelt on, prioritizing high-quality, profitable companies.
JAVA – The All-Weather Intrinsic Value Seeker 🧭
As another actively managed fund, JAVA uses a bottom-up, go-anywhere approach to find companies trading below their “intrinsic value”.
- The Recipe: This fund has the most diversified market-cap exposure, reaching further into small-caps (7.9%) than any of the others. This flexibility allows its managers to hunt for opportunities wherever they see them.
- Risk Profile: JAVA offers a balanced risk profile, providing solid downside protection (97.47% 3-year capture) while still participating in rallies, as shown by its strong 2023 performance.
- Flavor Profile: This is a flavor for investors who trust active management to navigate different market cycles and who want a portfolio that balances risk and reward by looking for value across the entire market-cap spectrum.
Conclusion: Choose Your Flavor
As we’ve seen, four ETFs targeting the same “value” factor deliver four very different investment experiences. There is no single “best” flavor—only the one that’s right for your portfolio’s goals.
To summarize:
- For broad, benchmark-aware value exposure, consider IVE.
- For a deep, quantitative, and high-conviction value tilt, look at VLUE.
- For a risk-managed, defense-first value approach with a quality screen, DFLV is a strong candidate.
- For an active, flexible strategy seeking intrinsic value across all market caps, JAVA fits the bill.
The label on the bottle only tells you part of the story. Understanding the ingredients inside is the key to making a smarter investment decision.
Ready to find your flavor? The analysis in this post was based on a detailed Fund Comparison Report. Sign up for a free account today to view the full report and run your own powerful side-by-side comparisons.
Disclosures
This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.
This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.
