The value label hides a 1,100-basis-point rules decision

The iShares Russell 1000 Value ETF, an $83 billion fund, gained 21% for the year through September 10, while the $37 billion SPDR Portfolio S&P 500 Value ETF rose 11% over the same stretch—and since both buy large-cap U.S. value equities, the 1,100-basis-point spread between them, reported by ETF Trends, is the most instructive number the value trade has produced in 2026.

Set that against the benchmarks each fund draws from: the Russell 1000 and the S&P 500 were each up 11% to 12% over the identical period, so one value index cleared its own parent by roughly nine points while the other finished level with it. Both funds sit inside the same broad universe and the same style, which puts the performance question in the index methodology rather than in the market's appetite for cheap stocks.

What separates the two rulebooks is in the documents. FTSE Russell screens for value using price-to-book ratios alongside medium-term growth forecasts, so a forward-looking estimate helps decide what enters a value index; S&P Dow Jones Indices builds SPYV from book value, earnings-to-price and sales-to-price. Each screen is recognizably value; each produces a different roster at different weights, and the fund's name flattens all of it into one word.

Sector tables are the usual first stop and the wrong one. Financials are the largest allocation in IWD at 19.4% with Technology close behind at 18.9%, while SPYV flips the order to Technology at 19.6% ahead of Financials at 16.1%; Health Care and Consumer Discretionary line up nearly as tightly across the two funds. On sector weights alone they look like near-twins that 2026 had no reason to separate; VettaFi counts only about 70% overlap in their holdings, and the third of the book that differs, plus the different weights on the two-thirds that does not, is where the dispersion was made.

Schwab's Fundamental U.S. Large Company Index ETF runs a third set of rules on $28 billion, selecting and sizing holdings on adjusted sales, operating cash flow and leverage-adjusted distributions; it rebalances rather than merely reconstituting, a distinction the ETF Trends comparison treats as central to how the fund behaves. FNDX returned 19% through September 10, between IWD and SPYV, with Apple at 4.5%, Microsoft at 2.8% and ExxonMobil at 2.5% as its largest positions and Energy at 11% of the portfolio. Weightings are spread far more evenly than in either cap-weighted fund, and the top of that book would not look out of place in a broad-market index; ETF Trends notes that some investors treat it as a complement to a cap-weighted value allocation, a fair way to describe a third rulebook landing close to the leader without repeating its recipe.

FNDX shares 67% of its names with IWD and 64% with SPYV, nearly the same distance from each, yet it finished far closer to the leader than to the laggard. Overlap measures which names two funds own and says nothing about how much of each they own; the weighting arithmetic is what set the year's returns, and the two funds that share about 70% of their holdings ended it with that same spread. VettaFi, which the ETF Trends piece discloses is the index provider behind FNDX, supplied the overlap figures.

Value's return to fashion may be the year's most repeated observation, and the broadening of the rally beyond growth stocks is real enough, since it carried both parent indexes into double digits. Tweedy, Browne, the firm behind Ben Graham's brokerage, has been making the value case to ETF investors since August; the construction-first version of that argument travels further because it does not require anyone to be right about the style. This publication made a related point earlier in September, when the membership screen and the weighting scheme together accounted for a small-cap fund's 200-basis-point edge over both of its benchmarks.

For issuers, the read is a licensing problem. A value methodology is a set of screens and weighting rules published for anyone to read and copy; the schedule on which those rules are allowed to act is harder to replicate. FNDX rebalances where IWD and SPYV reconstitute, and how often a portfolio is reset may matter more than what the screen tests for. Funds sitting at the bottom of this year's spread will face questions about their index construction, and most can answer honestly that the methodology did exactly what it said it would; that is the uncomfortable part for anyone selling the category on its label—dispersion of this size is the rulebook performing as written.

Track the IWD-to-SPYV spread through the fourth quarter, along with the overlap percentage printed next to it. If two funds can stay roughly 70% identical and finish a calendar year with that spread while their parent indexes end within a percentage point of each other, the value label will have been the least informative line on the fact sheet, and the index methodology the first one worth reading in 2027.