A bullish trend in value and growth is likely in the second half of the year.
VettaFi’s Todd Rosenbluth thinks value stocks, which have been lagging the market, could get a boost from one of the biggest events on Wall Street this year: the annual rebalancing of the FTSE Russell index.
“Value is something to watch,” the firm’s head of research told CNBC’s “ETF Edge” this week. “It feels like… growth has outperformed value (for) a long time.”
On Friday, Russell indexes underwent their annual reorganization to reflect market changes as companies grow and transform. this iShares Russell 1000 Growth ETF It’s up 20% year to date, while iShares Russell 1000 Value ETF rose nearly 6%.
“We do think there is a place for both growth and value in the broader portfolio – it’s just that people are leaning more toward growth as we move into the second half of the year,” he added. “There are periods when the pendulum swings toward value.”
Fiona Bassett, CEO of FTSE Russell, said on “ETF Edge” that these indices were established to reflect the nature of the market.
“One of the benefits of the Russell franchise is the different exposure we’re able to provide,” she said. “So for those who want concentrated exposure to value or growth, we have indexes available to do that.”
As of May 31, FactSet reported that the top three holdings in the Russell 1000 Growth ETF were Microsoft, apple and Nvidia. Meanwhile, the top holdings of the Russell 1000 Value ETF are Berkshire Hathaway, JPMorgan and Exxon Mobil.
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