In the ongoing bull market rally, growth stocks and related exchange traded funds have been outperforming the value style as investors chase after higher returns.

Looking at the growth style, mid-cap growth has stood out this year, with the iShares Morningstar Mid Growth ETF(NYSEArca: JKH) up 31.9%, iShares Russell Midcap Growth ETF (NYSEARCA: IWP) up 28.5%, First Trust Mid Cap Growth AlphaDEX Fund (NasdaqGM: FNY) up 27.9% and Vanguard Mid-Cap Growth (NYSEArca: VOT) up 27.2% year-to-date.

In comparison, the Vanguard Value Index Fund ETF Shares (NYSEArca: VTV), the largest listed value-focused ETF by assets, rose 15.6% so far this year.

It’s common to see secular-growth stocks outperform during periods when broad economic growth is slipping or during the late economic cycle. However, some observers argued that investors are simply joining the crowd in the most popular stocks this time around.

“Active investors are now ‘buying what’s working’ more aggressively than usual: our 12-month price momentum factor is almost 25% more overvalued on forward earnings than usual. … And hedge funds remain net long high momentum stocks,” Quantitative strategists at Bank of America Merrill Lynch said last week.

And, on the other hand, “risk or uncertainty factors are close to record historic levels of cheapness. … Companies with a high level of ‘analyst disagreement,’ measured by dispersion among EPS estimates, are trading at a notable 51% discount” to their long-term average.

Jared Holz, health-care-stock trading strategist at Jefferies, also highlighted the ongoing preference for growth as investors chase after the continued momentum in some segments of the market.

“All that matters is momentum. Like everything else, investors are willing to pay up for growth at any price in the healthcare space, … Investors would rather just hang out in stocks that go up every day though on pure numbers possess less upside than stocks that are (more) out of favor. And that has been a winning strategy so as much as we would like to think that there should be a bit more reversion in the market, it is not happening,” Holz said.

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