Growth stocks outperformed their value counterparts for much of 2025, but that trend started to shift toward the end of the year. Value stocks have seen more consistent returns heading into 2026. They’ve managed to come out ahead as uncertainties around artificial intelligence’s impact on various industries have rattled the markets.

Over the past 12 months, the Morningstar US Growth Index rose 8.33%, while the Morningstar US Value Index gained 18.60%.

Morningstar Chief US Market Strategist Dave Sekera suggests using value stocks to hedge against potential elevated volatility in 2026. “If the market sells off, we’d expect value stocks to hold their value better and can be sold, and the proceeds used to increase positions in those…