Value stocks are significantly outperforming growth stocks in 2026, with the Vanguard Value ETF up 14.4% year to date as of June 26, compared to a 1.8% gain for the Vanguard Growth ETF. The rotation into value has been driven by concerns over the Iran war, persistent inflation above 4%, and the Federal Reserve's hawkish stance, which have made investors more risk-averse. In June alone, the value ETF outperformed the growth ETF by 11 percentage points. With no clear resolution in sight for these macro uncertainties, value stocks are expected to maintain their edge for the remainder of the year, as they offer potential downside protection and mega-cap growth leaders trade well below their all-time highs.