Advisors and investors seeking to diversify their equity portfolios this year should consider the T. Rowe Price Value ETF (TVAL ). The fund combines active management and value investing in a strategy and offers outperformance compared to its benchmark YTD.
TVAL seeks long-term capital growth by investing in undervalued companies. While some companies may have recently fallen out of favor, the fund managers believe they demonstrate notable potential for capital appreciation. The fund may invest across market caps but primarily invests in large-cap stocks.
The management team creates the portfolio using bottom-up analysis of individual securities. This analysis focuses on individual stock performance and metrics but does consider macro trends. The bottom-up analysis measures dividend yield, price/earnings ratios, price/book value ratios, cash flow, and more. The strategy also considers any undervalued assets and restructuring opportunities a company may have.
Diversification & Outperformance When Value Investing
The focus on value stocks creates a diversified portfolio compared to broad equity benchmarks. TVAL’s top sectors by weight included financials at 24.52%, industrials at 16.39%, and healthcare at 14.06%, as of January 31, 2025. For comparison, the broad Russell 1000 Index’s top sectors included information technology at 34.63%, consumer discretionary at 15.77%, and industrials at 12.59% as of the end of January, according to FTSE Russell data.
TVAL also outperforms the Russell 1000 Value Index benchmark, measured using the iShares Russell 1000 Value ETF (IWD ). TVAL generated higher total returns than IWD year to date and over the trailing 12-month period that ended on February 12, 2025. TVAL is up 5.17% YTD compared to IWD’s 4.33% as of February 12, 2025, according to Y-Charts data. It also outperforms the broad Russell 1000 Index YTD, with the Index offering total returns of 3.27% over the same period.
TVAL carries an expense ratio of only 0.33%, making it an affordable, actively managed solution for investors seeking equity diversification.
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