A persisting story in the extended bull run is whether growth stocks have performed their swan song and value is ready to take the lead. Currently, there could be an overvaluation of growth-oriented equities that could feed into value strength.

“Despite the current respite, the escalation of a major conflict with Iran looms ominously,” wrote James Berman in Forbes. “Meanwhile, growth stocks look almost as overvalued as they did exactly 20 years ago. The possibility of outright war with Iran or a major Middle East conflagration—or still worse, the possibility of a global clash—certainly has the potential to start a bear market in growth stocks, the most overvalued pocket of the equities market.”

However, Berman cautions investors that selling off growth equities shouldn’t be done as a market-timing move.

“Selling growth stocks should not be done out of some ill-fated, hapless effort to time the market around the outbreak of war: market timing doesn’t work,” said Berman. “Attempts to time entries and exits in the market are a futile exercise complicated by the counterintuitive nature of market movements. Instead, growth stocks should be sold simply because they are too expensive to justify their underlying fundamentals.”

Will a mass movement away from growth into more quality, safe investments be on the way? From a relative value ETF standpoint, this could put value over growth equities and defensive over cyclical equities in play—particularly, the  Direxion Russell 1000 Value Over Growth ETF (NYSEArca: RWVG) and the Direxion MSCI Defensives Over Cyclicals ETF (NYSEArca: RWDC).

RWVG seeks investment results that track the Russell 1000® Value/Growth 150/50 Net Spread Index. The fund, under normal circumstances, invests at least 80% of its net assets in securities that comprise the Long Component of the index or shares of ETFs on the Long Component of the index.

RWGV measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Value Index (the “Long Component”) and 50% short exposure to the Russell 1000® Growth Index (the “Short Component”). On a monthly basis, the Index will rebalance such that the weight of the Long Component is equal to 150% and the weight of the Short Component is equal to 50% of the Index value.

RWDC provides a means to not only see defensive sectors perform well, but a way to capitalize on their outperformance compared to cyclical sectors. RWDC tilts towards defensive sectors like health care and consumer staples as shown in the fund’s breakdown. Conversely, it shorts names like the top technology giants that skew towards momentum.

For more relative market trends, visit our  Relative Value Channel.