As growth stocks falter, value investments and related exchange traded funds are beginning to pick up the slack, and the momentum trade-off could continue, according to  Morgan Stanley.

Value stocks have significantly outperformed growth offerings since the beginning of March, reports Steven Russolillo for the Wall Street Journal.

In March, large-cap value stocks in the Russell 1000 Value Index have gained 2.2%, whereas the Russell 1000 Growth Index dipped 1.1%. Year-to-date, the value index is flat, compared to the 2.9% decline in the growth index.

“We determined that rotations this strong, while infrequent, are typically followed by periods where value outperforms,” Morgan Stanley strategist Adam Parker said in a note. “This has been the case even in those value rallies, such as the current one, that occurred without fundamental news favoring value stocks.”

Parker pointed out that energy and consumer-staples typically lead in this type of trading environment while tech and telecom sectors fall behind. Parker also noted that Morgan Stanley has trimmed its tech exposure.

The Energy Select Sector SPDR (NYSEArca: XLE) has gained 2.0% and Consumer Staples Select Sector SPDR (NYSEArca: XLP) rose 0.7% over the past month. Meanwhile, the iShares U.S. Technology ETF (NYSEArca: IYW) has declined 3.4% over the past month. [Signs of the Times: New Highs for These ETFs Say a Lot]

However, Parker warns that the markets, while still generating positive returns, will be strengthening at a slower pace.

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