An upside move is likely in both value and growth in the second half of this year.
Value stocks, which have been market laggards, could get a boost thanks to one of Wall Street’s biggest events of the year: FTSE Russell’s annual rebalancing, says VettaFi’s Todd Rosenbluth.
“What’s remarkable is the value,” said the firm’s head of research. CNBC’s “ETF Edge” this week. “It feels like… [for a] For a long time, growth has outperformed value.”
On Friday, the Russell indexes underwent their annual restructuring to reflect changes in the market as companies grow and change. iShares Russell 1000 Growth ETF has increased 20% this year, while iShares Russell 1000 Value ETF increased nearly 6%.
“We think there’s a place for both growth and value in a broader portfolio — it’s just that people tend to be more growth-oriented as we head into the second half of the year,” he added. “There have been periods where the pendulum has swung back in favor of value.”
FTSE Russell CEO Fiona Bassett said on “ETF Edge” that the indices are built to reflect the nature of the market.
“One of the benefits of the Russell franchise in general is our ability to provide different types of exposure,” she said. “So for those who want a value- or growth-focused approach, we have metrics available to do that.”
As of May 31, FactSet reports the top three holdings of the Russell 1000 Growth ETF were Microsoft, Apple And Nvidia. Meanwhile, the top holdings of the Russell 1000 Value ETF are Berkshire Hathaway, JPMorgan Chase And Exxon Mobil.
