A Vanguard Deep-Value Fund Is Up 22% While Growth Sits Flat

A Vanguard deep-value fund has returned 22% in 2026 while growth strategies tracked by the iShares Russell 1000 Growth ETF (IWF) have been roughly flat, according to 24/7 Wall St., with IWF last trading at 124.42, down 0.14% on the day as of 19:16 GMT on August 10, 2026.

The most profitable trade of 2026 so far has been the one almost nobody wanted to make. While investors parked in growth benchmarks have spent the year watching the Magnificent 7 stall, a Vanguard deep-value fund has returned 22% and has outpaced nearly every major exchange-traded fund on the market, according to 24/7 Wall St. Growth, over the same stretch, is flat.

That is a gap of roughly 22 percentage points between two styles that most investors treat as interchangeable slices of the same U.S. large-cap market. It is not a rounding error, and it is not the kind of spread that shows up in a quarter or two of noise. It is a full regime difference.

What the tape looks like right now

The iShares Russell 1000 Growth ETF (IWF) — the fund most commonly used as shorthand for U.S. large-cap growth exposure — was last quoted at 124.42, down 0.14% on the day, with an intraday range of 123.95 to 124.95 and a previous close of 124.60. That is as of the last trade at 19:16 GMT on Monday, August 10, 2026, with markets open. (The feed carrying that quote did not specify a currency.)

The broad benchmarks tell the same becalmed story. The S&P 500, via SPY, sat at $773.33, up 0.01% against a prior close of $773.26, inside a day range of $771.62 to $775.05. The Nasdaq 100 tracker QQQ was at $722.00, down 0.14% from $723.03. The Dow 30 proxy DIA was the weakest of the three at $538.37, off 0.23%.

Three headline indices moving less than a quarter of a percent between them is the texture of a market that has stopped rewarding the crowd trade and has not yet decided what to reward instead. Underneath that flat surface, the style rotation has been doing all the work.

Why "deep value" behaves differently from plain value

Value funds are not one thing. A conventional value index fund buys the cheaper half of the large-cap market by measures such as price-to-book or price-to-earnings, and in practice ends up holding a lot of very large, very well-known companies that happen to trade at a discount to the index. Deep value goes further down the valuation ladder. It concentrates in the genuinely unloved — companies priced as though their businesses are impaired, where the return comes from the discount narrowing rather than from earnings compounding.

That distinction explains both halves of the 2026 result. Deep value performs poorly, sometimes for years, when a narrow group of megacap winners is absorbing every marginal dollar of flow. It performs violently well when that concentration unwinds, because the starting valuations are low enough that modest re-rating produces large returns.

It also explains the ownership problem embedded in the headline. Funds that trail during a long growth cycle bleed assets and attention. By the time the cycle turns, the shareholder base has thinned out to the patient and the stubborn. The performance arrives; the crowd does not.

The concentration risk investors stopped pricing

For most of the past decade, the case against holding a growth index was theoretical. Yes, the top handful of names accounted for an outsized share of the benchmark. Yes, that made a supposedly diversified fund a concentrated bet on a single business theme. But the concentration kept paying, so the objection stayed on paper.

A flat year changes the arithmetic of that argument. When the leaders sputter, an index weighted toward them does not simply lag — it has no internal engine to replace them, because the smaller constituents are too small to matter. That is the mechanical reason growth can go nowhere while a portfolio built from the opposite end of the valuation range compounds at double digits.

The lesson is not that growth is broken. It is that style exposure is a real risk factor, and a portfolio that holds an S&P 500 fund, a Nasdaq fund and a large-cap growth fund is not diversified across three things. It is the same bet, sized three times.

What a 22-point spread actually does to a portfolio

Consider the illustrative case of two investors who began 2026 with identical balances, one entirely in a growth tracker and one entirely in the deep-value fund. On the figures reported — flat versus up 22% — the value investor ends the period with 22% more capital, before any consideration of fees, taxes or dividends. That is a hypothetical scenario built from the two reported returns, not a reported result for any actual account, but it makes the point about what a single style decision compounds into.

The more realistic version is the investor who owns some of each. A blended portfolio captures part of the spread automatically, which is the entire argument for holding both sides rather than trying to time the handoff. Rotations of this size are rarely called in advance; they are usually identified after enough of the move has already happened that chasing it becomes its own risk.

What to watch from here

Three things will determine whether this is a genuine regime shift or a sharp counter-trend move inside a longer growth cycle.

• Flows. Deep-value funds that outperform quietly eventually get discovered. Sustained inflows would confirm institutional buy-in; a performance run with no flow behind it suggests the market still treats it as a fluke.
• Megacap earnings. The Magnificent 7 stalling on price is not the same as stalling on profits. If earnings hold up while multiples compress, growth becomes cheaper and the value trade loses its relative edge.
• Breadth. Watch whether the Dow-type industrial and financial exposure keeps pace with the S&P 500. On Monday it did not — DIA's 0.23% decline was the largest of the three benchmark moves — which is a reminder that "not growth" is not automatically "value."

For anyone reviewing an allocation, the practical takeaway is narrower than the headline. It is not that a 22% return should be chased after the fact. It is that a year in which growth went flat and deep value did not is a live test of whether a portfolio was ever diversified in the way its owner assumed. The results of that test are on the statement.

Frequently asked questions

How much has the Vanguard deep-value fund returned in 2026?

According to 24/7 Wall St., the Vanguard deep-value fund has returned 22% so far in 2026, outpacing nearly every major exchange-traded fund on the market this year. Over the same period, U.S. large-cap growth strategies have been roughly flat, leaving a gap of about 22 percentage points between the two styles.

What is IWF and how has it traded?

IWF is the ticker most commonly used as shorthand for U.S. large-cap growth exposure, tracking the Russell 1000 Growth index. As of the last trade at 19:16 GMT on August 10, 2026, it was quoted at 124.42, down 0.14% from a previous close of 124.60, within an intraday range of 123.95 to 124.95.

What is the difference between value and deep value?

A conventional value fund buys the cheaper half of the market by measures such as price-to-book, often ending up in large, well-known companies trading at a discount. Deep value goes further, concentrating in genuinely distressed or unloved names where returns come from the valuation discount narrowing rather than from steady earnings growth.

Why does hardly anyone own the outperforming fund?

Deep-value strategies typically lag badly during long growth cycles, which drives away assets and attention. By the time the cycle turns and the strategy starts working, the shareholder base has already thinned to a small group of patient holders. Strong performance therefore arrives before the crowd does.

How did the major indices trade on August 10, 2026?

All three headline benchmarks were close to unchanged. SPY, tracking the S&P 500, was at $773.33, up 0.01%. QQQ, tracking the Nasdaq 100, was at $722.00, down 0.14%. DIA, tracking the Dow 30, was the weakest at $538.37, down 0.23% on the day, as of 19:16 GMT.

Does this mean investors should sell growth and buy value?

Not on this evidence alone. A large spread identified after the fact is difficult to chase safely, and megacap earnings could reassert themselves. The more durable takeaway is that owning an S&P 500 fund, a Nasdaq fund and a growth fund is largely the same bet three times, rather than genuine diversification.

Sources

• Growth Is Flat in 2026. Vanguard’s Deep-Value Fund Is Up 22%, and Almost Nobody Owns It — 24/7 Wall St

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