Factor Leadership Rotates. 2026 Is No Exception

Look back at over 10 years of the 6 U.S. factor returns, one pattern dominates: the leaderboard changes.

For much of the past decade, Value struggled. Even in its stronger years, it spent more time near the bottom of the rankings than at the top. Momentum and Quality often led the pack, rewarded by a market that favored high-growth, high-quality businesses.

2025 and 2026 has marked a change as Value rose toward the top returns, a reminder that a decade of underperformance doesn't mean a factor has lost its relevance.

Broadly, it is fair to say that no single factor delivers top-tier returns year after year. Each factor is grounded in an economic rationale and has demonstrated the ability to generate a return premium at some point over the last 10 years. The challenge though, is that no investor can reliably predict which factor will lead in any given year. Factor leadership rotates; sometimes gradually, sometimes abruptly.

At V-Square, we utilize a multi-factor approach. We believe a well-constructed, multi-factor portfolio can be designed to give investors the ability to harvest factor premiums and to participate in leadership wherever it emerges.

How are you thinking about factor exposures in your portfolio? We'd love to hear your perspective.

Source: V-Square Quantitative Management LLC, Bloomberg, iShares ETF Total Returns. ETF Returns used to illustrate factor returns; iShares MSCI USA Value Factor ETF (VLUE) for Value, iShares MSCI USA Momentum Factor ETF (MTUM) for Momentum, iShares MSCI USA Quality Factor ETF (QUAL) for Quality, iShares MSCI USA Min Vol Factor ETF (USMV) for Minimum Volatility, iShares MSCI USA Equal Weighted ETF (EUSA) for Size (Equal Weight), and iShares Core High Dividend ETF (HDV) for High Dividend.. Data shown between January 1, 2015 and May 19, 2026.