Growth style-related exchange traded funds are beginning to outperform as investors jumped on this battered segment of the market in the latest rally, with the low inflation reading fueling the most recent run.
Over the past month, the SPDR Portfolio S&P 500 Growth ETF (SPYG) increased 11.8% while the SPDR S&P Portfolio S&P 500 Value ETF (SPYV) rose 6.9% and the SPDR S&P 500 ETF Trust (SPY) gained 9.3%.
The SPDR Portfolio S&P 500 Growth ETF tracks the S&P® 500 Growth Index, which offers exposure to S&P 500 companies that display the strongest growth characteristics based on sales growth, earnings change to price ratio, and momentum.
On the other hand, the SPDR S&P Portfolio S&P 500 Value ETF tracks the S&P® 500 Value Index, which offers exposure to S&P 500 companies that could be undervalued relative to the broader market and selects companies with the strongest value characteristics based on book value to price ratio, earnings to price ratio, and sales to price ratio.
Investors have been piling into the equity markets with growth stocks leading the charge. U.S. equity funds have attracted $11 billion in net inflows over the past week ended Wednesday, marking the largest weekly inflow in eight weeks, and growth stocks brought in their largest weekly inflow since December 2021, Reuters reports.
Tech stocks enjoyed $0.6 billion in net inflows, the largest in eight weeks as well, and growth-styled stocks brought in $2.5 billion, their biggest inflow since December 2021. The technology sector and the broader growth segment typically do well in a lower rate environment, and the latest slowdown in inflation data fueled bets that the Federal Reserve will rein in its aggressive monetary policy stance.
Meanwhile, ETF investors have also been jumping back into the growth style as well. Specifically, among the most popular ETF plays in the past week, SPYG attracted a little over $800 million in net inflows, and the technology-heavy Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, saw close to $1.8 billion in net inflows, according to VettaFi.
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