Here's Why Investors Can Bet On These Value ETFs

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Value investing is seeing growing popularity in 2021. Investors are upbeat about accelerated coronavirus vaccine rollout, introduction of another round of fiscal stimulus and the reopening of U.S. economy, which may lead to faster U.S. economic recovery from the pandemic-led economic slowdown. These factors are creating a conducive environment for value stocks to outperform their growth counterparts this year. Notably, the Russell 1000 Value index has climbed 17% so far this year, whereas the Russell 1000 Growth index is up 5%.

Going on, Keith Lerner, chief market strategist at Truist, has also commented that “technology sector earnings momentum relative to the broader market peaked in late May of 2020. Given that we expect the economy to grow well above trend this year and next, value stands to benefit. Indeed, when looking at the value indices, they are dominated by financials and tend to have greater exposure to economically-sensitive sectors that are more leveraged to an economic recovery,” according to a CNBC article.

Steve Chiavarone, portfolio manager, equity strategist and vice president at Federated Hermes, also believes that cyclical stocks belonging to the value investing category are projected to witness 250% earnings growth in the second quarter, per a CNBC article.

Furthermore, the streak of upbeat U.S. economic data is keeping investors upbeat. The U.S. economy grew an annualized 6.4% in the first quarter of 2021, breezing past expectations of 6.1%, following a 4.3% uptick in the previous three-month period. Apart from the reopening-driven third-quarter jump last year, the latest reading marked the best period for GDP since the third quarter of 2003.

The latest U.S. consumer confidence data looks encouraging as the metric has risen for the second consecutive month in April. Markedly, the metric hit a one-year high in March. The Conference Board's measure of consumer confidence index stands at 121.7 for April, comparing favorably with March’s revised reading of 109. Moreover, April’s reading beat the consensus estimate of 113.0, per a Reuters’ poll. Notably, the metric stands at the highest level since last February, when the index was at 132.6.

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