Tag: ETF building block

Mergers and acquisitions activity among banks is brisk this year, and with loan growth still sluggish, the consolidation trend is expected to continue. That could benefit the Invesco S&P SmallCap Financials Portfolio (NASDAQ: PSCF) .

Value stocks set scintillating paces in the first half of 2021. Then, some of the air came out of the value trade as 10-year Treasury yields retreated, supporting an uptick by growth stocks. For all the talk of value names pulling back, some investors might feel as though the group is back to its laggard ways

While small-caps can provide ample growth opportunities, getting factor exposure to value and momentum could open up even more avenues with the Invesco S&P SmallCap Value with Momentum ETF (XSVM) . Small-cap equities in particular could be subjected to large moves in the market.

The Consumer Price Index (CPI) rose again in August, though the increase was more modest than in the preceding several months. Still, the persistent vs. transitory inflation debate remains, well, persistent. With the inflation debate lingering for much of this year, investors are being treated to a laundry list of inflation-fighting investment ideas, including gold, real estate investment trusts (REITs), other hard assets, and Treasury inflation protection securities (TIPS), among others.

Value stock exchange traded funds climbed Wednesday as investors looked to the momentum behind the economic recovery. “The main factor in that move between growth and value is COVID and the Delta variant and its impact on the economy,” Tim Ghriskey, chief investment strategist at Inverness Counsel, told Reuters. 

After the coronavirus pandemic put many businesses on hold for a year, companies have kicked off an unprecedented deal-making spree, bolstering banks and financial sector-related exchange traded funds. 

With the S&P 500 on a seven-month winning streak, it may be hard to imagine that an equity market correction could be imminent. However, it is a possibility that investors should acknowledge — while remembering that corrections are natural and not as ominous as full-fledged bear markets.

Home to the likes of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and an assortment of other well-known growth stocks, the Nasdaq-100 Index (NDX) is a paradise for investors seeking growth exposure. Importantly, the Nasdaq-100 has a lengthy history of outperforming rival broader benchmarks, such as the S&P 500 and the Russell 1000.

The current macroeconomic backdrop has investors considering whether or not value’s ascendency still has legs to run. Yet it seems every market pundit has a different take on the growth vs. value debate. 

The growth/value debate is likely to continue raging through year-end, particularly if economic growth shows signs of topping and if Treasury yields remain volatile. However,

Value stock exchange traded funds jumped Friday while broad U.S. market indices hit record highs, following Federal Reserve Chairman Jerome Powell’s reassurances that the central bank will not overreact to the inflation spike and will maintain patience in tapering its bond purchasing program.

Growth were supported by strength in the technology segment Thursday as investors braced for potential tapering in the Federal Reserve’s bond purchasing program. Fueling bets that the Fed will begin rolling back its accommodative policies, data from the Labor Department on Thursday revealed weekly unemployment claims dipped to a 17-month low, which further supported the view of a recovering job market, Reuters reports .

More than seven months into 2021, are likely investors acquainted with the factor landscape at this juncture, at least as it pertains to the ever-popular growth/value debate. Owing to the economic cycle and the reopening/reflation trade, value stocks trounced their growth rivals for much of the first half of the year.

Small caps have been strong performers in 2021 as well as energy and value—wrap all three in one fund and you get a dynamic ETF in the Invesco Dynamic Energy Exploration & Production ETF (PXE) . Looking specifically at the Russell 2000 for small cap strength, the index is up 11% for the year.