For factor investors, there's a massive gap between growth and value stocks that appears to only be widening. As of July 24, 2026, the iShares Russell 1000 Value ETF, which tracks the Russell 1000 Value Index, had returned 18.88% year-to-date (YTD), while the iShares Russell 1000 Growth ETF was down 0.36%.
There are multiple potential reasons for this divergence. For starters, the ongoing Iran conflict and its resulting energy and commodity shocks may help value sectors more than growth sectors. In addition, the current interest rate environment is likely less favorable to growth stocks. Add to those a recent repricing of mega-cap AI stocks, and investors have even more pressure to diversify into value names.
