Todd Rosenbluth of VettaFi believes that historically underperforming value stocks may receive a lift from the FTSE Russell’s annual index rebalancing, a significant event on Wall Street.
“Value deserves more attention,” the research director stated on CNBC’s “ETF Edge.” “For a considerable time, growth has dominated value in terms of performance.”
The restructuring of the Russell indexes, which was carried out on Friday, seeks to reflect the shifting market dynamics as companies grow and change. So far this year, the iShares Russell 1000 Growth ETF has advanced by 20%, while the iShares Russell 1000 Value ETF has experienced an increase of nearly 6%.
He added, “It’s essential to maintain a mix of growth and value in one’s investment portfolio, though at present, there is a stronger leaning towards growth as we enter the second half of the year. There have been periods where value has regained favor over growth.”
Fiona Bassett, CEO of FTSE Russell, noted on “ETF Edge” that they create their indices to mirror the constantly evolving market environment.
“The strength of the Russell franchise lies in its ability to provide diverse market exposures,” she remarked. “This capability enables investors to focus on either value or growth based on their preferences, with specific indices designed for those targets.”
Data from FactSet as of May 31 reveals that the primary holdings of the Russell 1000 Growth ETF include major technology firms like Microsoft, Apple, and Nvidia. Conversely, the top constituents of the Russell 1000 Value ETF are conglomerate Berkshire Hathaway, banking giant JPMorgan Chase, and energy leader Exxon Mobil.
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