The second half of the year could see an uptrend in both value and growth.
VettaFi's Todd Rosenbluth believes value stocks, which have lagged the market so far, could get a boost from one of the biggest Wall Street events of the year: the annual rebalancing of the FTSE Russell.
“It's worth paying attention to the value,” the firm's head of research told CNBC's “ETF Edge” this week. “It feels like… [for a] For a long time, growth has exceeded value.”
On Friday, the Russell indices underwent their annual recomposition to reflect changes in the market as companies grow and change. iShares Russell 1000 Growth ETF has risen by 20% so far this year, while the iShares Russell 1000 Value ETF has increased by almost 6%.
“We believe there is room for both growth and value in a broader portfolio – it's just that people tend to lean more toward growth in the second half of the year,” he added. “There have been times when the pendulum has swung back in favor of value.”
Fiona Bassett, CEO of FTSE Russell, told ETF Edge that the indices are designed to reflect the nature of the market.
“One of the advantages of the Russell franchise in general is our ability to offer different types of investments,” she said. “For those who want concentrated exposure to value or growth, we have the indices that make that possible.”
As of May 31, according to FactSet, the three largest holdings of the Russell 1000 Growth ETF Microsoft, Apple And NVIDIAThe top holdings of the Russell 1000 Value ETF are Berkshire-Hathaway, JPMorgan Chase And ExxonMobil.