Factor investing in 2026 has produced the widest dispersion between styles in years. As of September 24, 2026, the iShares MSCI USA Value Factor ETF (VLUE) had returned 48.60% year to date and the iShares MSCI USA Momentum Factor ETF (MTUM) 27.44%, both far ahead of the 13.48% return of the iShares Core S&P 500 ETF (IVV) [4] [1] [5]. The iShares MSCI USA Quality Factor ETF (QUAL) returned 12.76%, slightly behind the market, and the iShares MSCI USA Min Vol Factor ETF (USMV) 5.43%, less than half of it [2] [3]. Value led, momentum followed, quality matched, and low volatility lagged: a pattern consistent with a year of rising Treasury yields, strong energy and financial earnings, and a market that rewarded cyclical exposure.
What factor investing is
Factor investing selects stocks by measurable characteristics that have historically earned a return premium or reduced risk: value (cheap relative to fundamentals), quality (high and stable profitability with low debt), momentum (strong recent price performance) and low volatility (stocks with smaller price swings). Index providers such as MSCI define rules for each, and ETFs track the resulting indexes at low cost; each of the four iShares funds discussed here charges 0.15% a year [1] [2] [3] [4]. The premiums are not steady. Each factor goes through multi-year stretches of outperformance and underperformance, and the four rarely lead at the same time.
Factor investing in 2026: the results so far
| ETF (index) | Factor | YTD total return (NAV) as of Sep 24, 2026 | Net assets | Expense ratio |
|---|---|---|---|---|
| VLUE (MSCI USA Enhanced Value) | Value | 48.60% | $9.6 billion | 0.15% |
| MTUM (MSCI USA Momentum) | Momentum | 27.44% | $20.8 billion | 0.15% |
| IVV (S&P 500) | Market | 13.48% | n/a | n/a |
| QUAL (MSCI USA Sector Neutral Quality) | Quality | 12.76% | $48.2 billion | 0.15% |
| USMV (MSCI USA Minimum Volatility) | Low volatility | 5.43% | $23.4 billion | 0.15% |
Sources: iShares fund pages [1] [2] [3] [4] [5]. Investors can compare these and other factor ETFs on DataPorium's ETF page [6].
Value: the leader by a wide margin
VLUE's 48.60% return is more than three and a half times the S&P 500's gain [4] [5]. The MSCI USA Enhanced Value Index selects the cheapest stocks within each sector on price to book, forward price to earnings and enterprise value to cash flow, which in 2026 pointed toward energy, financials and industrial companies whose earnings rose sharply as commodity prices and interest rates climbed. The fund holds 146 stocks and carried a 30-day SEC yield of 1.70% as of August 31, 2026, the highest of the four factor funds [4]. Value's long drought after 2008 is the reminder that this year's result is not a forecast.
Momentum: riding the same trend
MTUM returned 27.44% year to date with $20.8 billion in assets [1]. Momentum indexes rebalance toward recent winners, so by mid-2026 the fund had rotated into many of the same cyclical names that value held, which explains why both factors beat the market together. The risk in momentum is the turn: when leadership changes abruptly, as it did in March 2026 when the S&P 500 fell about 9%, momentum portfolios can lag until they reset.
Quality: matching the market, not beating it
QUAL returned 12.76%, within one percentage point of IVV, and remains the largest of the four funds at $48.2 billion [2] [5]. Its sector-neutral index selects 118 companies on return on equity, earnings stability and leverage [2]. Quality tends to shine in downturns and to keep pace in ordinary years; 2026 has been the latter. The fund's 30-day SEC yield of 0.76% reflects a portfolio tilted toward growth-oriented, low-payout companies [2].
Low volatility: the cost of defense
USMV returned 5.43%, about 8 percentage points behind the market [3] [5]. The fund's 173 holdings had a three-year equity beta of 0.49 and a three-year standard deviation of 9.41%, so it delivered exactly what its index promises, roughly half the market's risk, and in a rising market that means roughly half the return [3]. Its 25.60 price-to-earnings ratio shows that defensive stocks are not cheap, which is one reason value has beaten it so decisively this year [3].
What 2026 teaches about combining factors
- Dispersion is normal. A 43-point gap between value and low volatility in nine months is large but not unprecedented; single-factor bets are style bets on the macro cycle.
- Value and momentum can align. When cheap sectors also become the best performers, both factors win; when they diverge, holding both dampens the swings.
- Quality and low volatility are insurance. Their payoff comes in drawdowns; their cost is visible in years like 2026.
- Costs are no longer the differentiator. At 0.15% each, the funds cost about the same, so the allocation decision, not the fee, drives outcomes [1] [2] [3] [4].
The counterpoint to factor tilts is the market portfolio itself. IVV's 13.48% return with no style decision is a result most active managers would accept, and it required no view on interest rates, commodities or the business cycle [5]. Investors who tilt toward factors should do so with the expectation of long stretches on the wrong side of the market, and with a rebalancing rule that harvests the dispersion rather than chasing it.
Value beat low volatility by more than 43 percentage points in 2026 through September 24, the kind of gap that rewards diversified factor exposure and punishes chasing last year's winner.
Key takeaways
- Year to date to September 24, 2026: VLUE 48.60%, MTUM 27.44%, IVV 13.48%, QUAL 12.76%, USMV 5.43% [1] [2] [3] [4] [5].
- Value and momentum both overweighted the cyclical sectors that led in a year of rising yields and strong energy earnings.
- Low volatility delivered about half the market's risk (beta 0.49) and about half its return, as designed [3].
- All four factor ETFs charge 0.15%, so the allocation decision drives results, not the fee [1] [2] [3] [4].
Frequently asked questions
Which factor has performed best in 2026?
Value. The iShares MSCI USA Value Factor ETF (VLUE) returned 48.60% year to date as of September 24, 2026, against 13.48% for the S&P 500 ETF IVV [4] [5].
Why has low volatility underperformed in 2026?
USMV has a three-year beta of 0.49 to the market, so in a rising market it captures roughly half the gain; it returned 5.43% year to date as of September 24, 2026 [3].
Is factor investing worth it?
Factor premiums have existed over long periods but arrive unevenly. In 2026 value and momentum beat the market while quality matched it and low volatility lagged, so diversified exposure and a rebalancing rule matter more than picking a single factor [1] [2] [3] [4].
What do factor ETFs cost?
The iShares MSCI USA Value, Momentum, Quality and Min Vol Factor ETFs each carry a 0.15% expense ratio [1] [2] [3] [4].
