ETF Growth Strategy #1: Value Beating Growth
Last year, investors all focused on growth stocks that were posting fantastic gains despite valuations becoming stretched. However, the shift in strength this year has led to considerable outperformance in value stocks. The accompanying chart shows how the iShares S&P 500 Value ETF (IVE) has begun to pick up momentum versus its counterpart in the iShares S&P 500 Growth ETF (IVW).
This move is characteristic of a shift to stalwart dividend paying companies such as utilities, telecommunications, and even large-cap technology firms with cash-rich balance sheets. My favorite ETF to play this value opportunity is through the First Trust NASDAQ Technology Dividend ETF (TDIV). This ETF is chocked full of technology and telecommunication stocks with large cash positions, mature business models, and established dividend histories.
TDIV just recently made new highs this year and is continuing to show signs that the upward trajectory is firmly in place. If institutional investors continue to reposition their portfolios to take advantage of value stocks this year, I expect this ETF will benefit from that shift.