The second half of the year may bring a bullish move for both value and growth stocks. According to Todd Rosenbluth, head of research at VettaFi, value stocks, which have historically lagged behind growth stocks, could see a boost from the FTSE Russell’s annual rebalancing. Rosenbluth emphasized the importance of paying attention to value stocks, stating that it seems like growth has been outperforming value for a long time.
During the recent annual reconstitution of the Russell indexes, changes were made to reflect the evolving market landscape as companies grow and shift. While the iShares Russell 1000 Growth ETF has surged by 20% this year, the iShares Russell 1000 Value ETF has seen a more modest increase of nearly 6%. Rosenbluth highlighted the significance of including both growth and value stocks in a diversified portfolio, noting that investors have been leaning more towards growth stocks in the upcoming months.
FTSE Russell CEO Fiona Bassett shared insights on the indices, mentioning that they are designed to mirror the market’s characteristics. She pointed out that the Russell franchise provides various exposure options, allowing investors to concentrate on either value or growth. The indices are structured to cater to the preferences of investors seeking specific types of exposure in their portfolios.
According to FactSet data as of May 31, the top three holdings in the Russell 1000 Growth ETF include Microsoft, Apple, and Nvidia. On the other hand, the Russell 1000 Value ETF’s top holdings consist of Berkshire Hathaway, JPMorgan Chase, and Exxon Mobil. These holdings reflect the differences in sectors and companies favored by growth and value investors.
The upcoming months could present opportunities for both value and growth stocks. As investors navigate the market landscape and consider their portfolio allocations, balancing exposure to both growth and value stocks may be key to achieving a well-rounded investment strategy. With the annual rebalancing of the Russell indexes and shifting market dynamics, staying attentive to changes in the market environment will be crucial for successful investment decisions.