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Mind on the Market Chart of the Week Tech's Broadening into Value 80

Total Return in USD (Indexed to /31/25 01/31/26 02/28/26 03/31/26 04/30/26 05/31/26 06/30/26

(INDEX) Russell 1000 Growth / Technology -SEC - Total Return (INDEX) Russell 1000 Value / Technology -SEC - Total Return

Source: FactSet, Total Return data in USD as of July 21, 2026.

Value is winning, and not for the reason most investors think. YTD, the Russell 1000 Value Index has outperformed the Russell 1000 Growth Index by roughly 15% (FactSet, as of July 21). We’ve previously examined the outperformance of small caps and the dynamics of EM equities as two lenses on the “broadening out” trade; Value is the third leg. As the COTW shows, this broadening is also showing up within tech itself, as Value tech names have outpaced Growth by nearly 70% YTD. While many investors attribute the move to a rotation into cyclical sectors, the reality is more nuanced. Today’s Value index looks very different than it did years ago, reflecting both increased exposure to technology and a macro backdrop that continues to favor many of its ‘traditional’ sector exposures. So, we aim to answer the question: Why is Value working?

Contact Ginger Perry Dane Smith Investment Strategist Head of Investment Strategy & Research – North America

YTD Performance of Value Weight of Technology P/E NTM of Russell 1000 Tech Sector Sector in Value Index Value

+71.8% 18.6% 17.5x Source: FactSet, as of July 21, 2026. Source: FactSet, as of June 30, Source: FactSet, as of July 21, Total returns in USD. 2026. 2026.

For one, technology has infiltrated Value. Relative to the core Russell 1000, the Russell 1000 Value Index underweights technology and communication services, while overweighting sectors including financials, health care, consumer staples, and energy (FactSet, as of July 21). Given that positioning, one would expect Value’s YTD performance to be driven by its traditional overweight sectors. Instead, technology has been the single largest contributor to Value’s YTD return, outpacing every other sector by a wide margin (FactSet, as of July 21).

That outcome reflects a structural shift that has occurred over the last two decades. Technology’s weight in the Russell 1000 Value has risen from just 3.7% to roughly 18.6%, second only to financials (FactSet, monthly data June 30, 2006 – June 30, 2026). The “Value” label has increasingly captured a re- positioning of legacy and crossover technology names alongside traditional cyclical and defensive businesses. Perhaps, rather than serving as a direct counter-exposure to the AI trade, Value has quietly participated in it.