We are likely to see an upward move in both value and growth in the second half of the year.
VettaFi's Todd Rosenbluth believes value stocks, which have been lagging in the market, could get a boost from one of the biggest Wall Street events of the year: the annual rebalancing of the FTSE Russell index.
“It’s worth paying attention to value,” the firm’s head of research told CNBC’s “ETF Edge” this week. “It feels like… (for a long time) growth has outpaced value.”
Russell's indexes underwent an annual restructuring on Friday to reflect changes in the market as companies grow and transform. iShares Russell 1000 Growth ETF It's up 20% so far this year, instead iShares Russell 1000 Value ETF Nearly 6%.
“We think there is a place for both growth and value within a broader portfolio – people are just leaning more towards growth as we head into the second half of the year,” he added. “There have been periods where the pendulum has swung back in favour of value.”
Fiona Bassett, CEO of FTSE Russell, said on ETF Edge that indices are built to reflect the nature of the market.
“One of the benefits of the Russell franchise overall is our ability to provide different amounts of exposure. So, for those people who want to get focused exposure to value or growth, we have the indices available to do that,” she added.
As of May 31, FactSet reported that the top three holdings of the Russell 1000 Growth ETF were: Microsoft, apple And NvidiaMeanwhile, the top holdings of the Russell 1000 Value ETF are: Berkshire Hathaway, J.P. Morgan Chase And Exxon Mobil.