Many investors are familiar with the "value premium," a term that defines the history of superior performance by the least expensive corners of the stock market. Since 1927, U.S. large-cap value stocks have returned an average of 11.1 percent a year, while growth stocks have returned only 9.4 percent, according to data by economists Eugene Fama and Kenneth French. Among small-cap-value stocks, the average returns of 14 percent a year represent an even greater premium over the 9.2 percent return for growth.

But since 2007 value stocks have generally trailed growth stocks by a wide margin, marking their longest stretch of underperformance on record. The last time value took a back seat for a sustained period was during the dot-com era over 15 years ago. Experts attribute growth stocks' superior performance to the increased investor appetite for risk and a demand for strong earnings in the face of sluggish economic growth.

Since the beginning of the year, however, value has been playing catch-up. As of March 11 the iShares Russell 1000 Value ETF (IWD) was up 0.27 percent, while the ETF covering the growth side of the index was down 1.9 percent.

Despite this modest comeback the longer-term performance gap has left an unusually wide valuation chasm between the two camps. Recently, the value side of the Russell 1000 Index had a price-to-earnings ratio of 16.4 (based on trailing fiscal year earnings), while the growth side’s ratio was 21. The value side had a price-to-book ratio of 1.7, while the growth side’s ratio was 5.2.

Of course, cheapness alone is no guarantee of a turnaround, and a number of catalysts will need to come into play. If interest rates tick up and investors become convinced an economic recovery is truly under way, then value stocks, which tend to be sensitive to economic moves, could gain momentum. Certain value sectors, most notably financials, benefit from those rising rates. And if the dollar strengthens and rates inch up even at a gentle pace, U.S. companies could have more trouble growing earnings, which would make value stocks more attractive by comparison.

Increased attention to value stocks by some notable investors over the last few months is helping to bring the group back into the limelight. In a November research note, fund giant Pimco pointed out that "the current valuation gap between growth and value is wide relative to the last eight years. Continued economic expansion and rising rates may support value stocks more than growth stocks. Forward-looking equity investors may want to consider increasing allocations to value stocks given current valuations." In December, Patrick O'Shaughnessy, principal at O'Shaughnessy Asset Management, told CNBC's Squawk Box that the anticipated Fed rate increases in 2016 bode well for value stocks, which have outperformed in 14 of the last 17 rate tightening periods.


The Value ETF Universe

Growth and value ETFs usually have very different sector allocations, although individual holdings can sometimes overlap when stocks have characteristics that straddle both camps. Microsoft, which appears in the top 10 holdings for both the growth and value versions of the Russell 1000 Index, is a classic example of this. But broadly speaking, information technology and consumer discretionary stocks tend to dominate growth, while value skews toward financials, industrials and energy.

According to ETF.com, there are 49 exchange-traded funds that focus on the rainbow of value propositions. Some use price-to-book ratios as a primary measure, while others focus on price-to-earnings, price-to-sales or some combination of these. Most cover the large-cap universe, although a good number are devoted to small and mid-caps and international. Above-average dividends characterize many, but not all of them. Here are a few noteworthy value ETFs that represent a variety of investment styles and focuses.

U.S. Large Cap

It's hard to discuss large-cap value ETFs without using the largest of the group, the iShares Russell 1000 Value Index fund (IWD) as a starting point. With a large asset base of $27 billion and substantial trading volume, this is the most liquid option in the group, although its expense ratio of 0.20 percent isn't the lowest. Its large sector bets in financials and energy offer investors very different exposure than they would get in the growth side of the index, which emphasizes information technology  and consumer discretionary . Vanguard's Value ETF (VTV) and Schwab's U.S. Large Cap Value ETF (SCHV) offer similar exposure with lower expense ratios (0.09 percent and 0.07 percent, respectively).

The Guggenheim S&P 500 Pure Value fund (RPV) uses a somewhat different approach by tracking an index of mostly large-cap U.S. stocks in the S&P 500 index. Because it does not employ market-cap weighting, it has broader exposure to mid-caps, and more volatility, than most of its peers. With the fund’s high stakes in financials and energy, its investors also get greater exposure to those areas than they would in more traditional market-cap-weighted value ETFs. While the fund’s 0.35 percent expense ratio is relatively high for its peer group, its mid-cap tilt has given the ETF a performance advantage over other value offerings in the last few years.

Another non-traditional value ETF, the iShares MSCI USA Value Factor ETF (VLUE), takes a relative value approach by focusing on the cheapest stocks within each sector, rather than the cheapest parts of the market. This gives it a very different sector profile than that of its competitors, with technology, financials and consumer cyclicals representing its largest exposures.

U.S. Small Cap

Over long-term periods, small-cap value stocks have outperformed most major asset classes by a substantial margin, although they are more volatile and tend to fare poorly during market downturns.

The largest player in the group, the Vanguard Small-Cap Value ETF (VBR), has a weighted average market cap of $3.6 billion and a modest expense ratio of 0.09 percent. Using the market-cap-weighted CRSP Small Cap Value Index, it targets the cheaper half of the U.S. small-cap market using metrics such as price-to-book, price-to-sales and price-to-earnings ratios. Like its large-cap counterparts, the ETF skews toward traditional value sectors such as financials, industrials  and consumer cyclical .

Others in the group include the iShares S&P Small-Cap 600 Value ETF (IJS) and the iShares Russell 2000 Value Index ETF (IWN). With a weighted average market cap of $1.48 billion, the former offering has more of a presence in the smaller end of the small-cap universe than the Vanguard Small-Cap Value fund. It also leans less on financial stocks but more heavily on industrials. The iShares Russell 2000 ETF relies solely on price-to-book value as its metric for measuring value in the small-cap universe, and at $1.72 billion its average market cap is also low. At 44 percent of assets, financials are represented more heavily here than they are in other small value ETFs.

Rounding out the roster is the Guggenheim S&P SmallCap 600 Pure Value ETF (RZV). Like its large-cap counterpart, the ETF also eschews market-cap weighting, and with an average market capitalization of $904 million, it dips more into micro-caps than its peers.

International

Like their U.S. counterparts, foreign stocks also have a value premium. And in a pattern similar to that of the U.S., growth has trounced value over the last few years, leaving a wide valuation chasm between the two. The value side of the MSCI EAFE Index, a broad measure of foreign developed markets, recently had a trailing fiscal year price-to-earnings ratio of 13.4, while the ratio was 21 for the growth side.

The largest international value ETF, the iShares Core MSCI EAFE Value Index ETF (EFV) targets the less expensive half of the MSCI EAFE Index and selects stocks based on price-to-book value, price-to-earnings ratios and dividend yields. It has heavy exposure to Japan  and the U.K., and the rest of the fund is mostly in European countries such as France, Germany and Switzerland. A 12-month trailing yield of 4 percent and the fund’s decent 0.40 percent expense ratio make it a solid option for income seekers.

Although it doesn't have the word "value" in its name, the methodology of the Schwab Fundamental International Large Company Index ETF (FNDF) for choosing stocks gives the portfolio a distinct value tilt. Instead of using market capitalization to determine weightings, it allocates to its holdings by taking into account their retained operating cash flow, adjusted sales and dividends plus buybacks. While the geographic allocations are similar to those of the iShares Core MSCI EAFE Value Index ETF, the fund has less allocated toward financials.

Another value offering, sans the label, is the WisdomTree International Equity Fund (DWM), which invests in dividend-paying companies outside the U.S. and Canada that meet its capitalization and liquidity requirements.

Most international ETFs, including those listed here, don't use currency hedges, and their performance has been hurt by a strengthening dollar over the last couple of years. For those who want protection against a stronger dollar, WisdomTree offers a hedged version of its international ETF that trades under the symbol “HDWM.”