Broadly speaking, investors have tended to favor growth strategies over value approaches for the last few years. However, as the first months of the new year have showcased, 2026 is shaping up to be a completely different macroeconomic picture. Crucially, the environment we find ourselves in could work in favor of disciplined value investors.
There are a few different drivers that could distinctly benefit value strategies this year. For starters, there’s the risk of inflation and how the Fed can tackle it. Yes, interest rate cuts seem to be on hold for now, but Kevin Warsh is taking the reins at the central bank as it faces a number of flashing inflationary signals, be it from the CPI or the PPI.
Fortunately, even if the Fed does not prefer higher inflation, value stocks tend to historically do well in such an environment. History has shown that value stocks with strong pricing power have performed admirably during bouts of inflation.
See More: Worried Inflation is Back? Why Active Fixed Income Wins
AI Momentum Goes Beyond Tech Stocks
The Fed’s fight against inflation isn’t the only catalyst working for value investors. Adoption and innovation in the AI space could also have a key role to play for value strategies this year.
At first, most of the investment opportunities occurring through artificial intelligence were limited to the tech sector. However, as adoption broadens to a variety of different sectors, value-focused investors have a key moment to capitalize.
One of the key promises of AI adoption is to increase efficiency while promoting innovation. By locating companies that are early in the stages of benefitting from adopting this technology, investors can tap into compelling value opportunities.
Federal policy could also very much work in favor of value investing, as well. Part of the promise of the “One Big Beautiful Bill” Act is to amplify near-term cash flow for businesses, lower tax burdens, and more. These benefits can work directly in favor of value investors as companies tap into extra cash flow while being encouraged to increase domestic projects.
See More: BNY’s BKDV Large-Cap Value ETF Passes $1 Billion in AUM
BKDV: An Active Value Approach With a Strong Track Record
The BNY Mellon Dynamic Value ETF (BKDV ) could help investors looking to amplify their exposure to value stocks. BKDV is an actively managed fund from BNY Investments. It focuses on value companies with strong fundamentals and momentum.
Using a bottom-up approach, BKDV’s portfolio team focuses on three factors when selecting companies to invest in: intrinsic value, sound business fundamentals, and positive business momentum. This strategy helps the fund achieve a balanced portfolio of companies that are each in a strong position to deliver results in the long-term.
So far, BKDV is offering compelling performance to justify its approach to value investing. As of April 30, 2026, the fund’s NAV is up 32.13% over the last twelve months.
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