As far as exchange traded funds (ETFs) divvied up by cap size and growth vs. value, it’s been all about the mid-caps so far this year. For the last three months, mid-caps have returned 4.5% in the value category, 8% in the blend and 10.5% in growth.
But now ETF provider SPA says there are a number of factors that are priming the large-caps for strong performance.
The provider, which uses MarketGrader for its investment methodology, says many factors are pointing at the large-cap sector relative to small-caps and U.S. bonds, reports Easier Finance.
Large-caps over the last three months are down 6.2% for value, 0.9% for blend and up 3.1% for growth.
Reasons SPA says large-caps will regain their strength:
- The trade-weighted dollar index is at its lowest level on record.
- Bond yields have fallen below equity yields.
- Large-caps perform well during high volatility.
- Large-caps are cheap compared to small-caps on a fundamental basis.
If the predictions come to fruition, some large-cap focused ETFs to consider:
- SPA ETF Market Grader Large Cap (SZG), down 5.1% year-to-date
- iShares S&P 100 Index Fund (OEF), down 11.9% year-to-date
- SPDR S&P 500 ETF (SPY), down 9.4% year-to-date
- Vanguard Large cap ETF (VV), down 8.4% year-to-date
- PowerShares QQQ (QQQQ), down 7.1% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.