Under the influence of inflation expectations, value stocks have replaced technology stocks as the market leader.
According to the data, the value stock ETF outperformed the growth stock ETF steadily.
Wall Street is blowing a wave of rapid and crazy shift to value stocks, while long-time darling technology stocks are going downhill.
Across global markets, stocks linked to economic growth have performed well, with rising commodities pushing inflation expectations in the bond market to a 15-year high.
A strategy of betting on undervalued stocks and shorting high valued stocks rose again on Tuesday after the biggest gain in two months on Monday. NasdaqThe 100 index opened down 2%, while the Dow JonesThe index fell just 1.1%.
The Russell 1000 value index is up more than 1.3% this month, while the Nasdaq index has turned downwards. This affected the exchange-traded fund (ETF) market, and ETF, which invests in value stocks, steadily outperformed ETF, the growth stock, according to smart smart-beta.
All this means that quantitative investors who persisted in value investing during COVID-19 's epidemic are making a comeback, while traders in a large number of speculative technology sectors, such as Cathie Wood's ARK fund, are at a disadvantage.
This is a long road to revival. And TeslaValue stocks are usually more dependent on the business cycle than such tech stars. In recent years, they have been lagging behind, especially when last year's epidemic prevention blockade led to a further influx of investors into Zoom.When waiting for the home concept stock.
Although most of the gains in value stocks in the bull markets after previous crises have been short-lived, this time many analysts do not think they will be fleeting meteors.
Higher inflation expectations tend to benefit value stocks because they are usually accompanied by faster economic growth andHigher bond yields. At the same time, the long-term outlook for technology stocks has been undermined by high interest rates.
Over the past month, the energy, materials and financial sectors have led the S & P 500. Technology stocks performed worst.
Even former sceptics expect the wheel buying to continue. Sanford C. Bernstein strategists, who once joked that value fund managers had no clients, said in a report on Friday that value stocks "still have a lot of ammunition."
"value stocks are still the least crowded area of the market for investors," they wrote in a report. In the long run, this kind of rotation is not just a short reversal of value stocks that have lost for a long time. "
However, at least a large number of managers have not yet joined the bullish ranks. Bank of AmericaLast week it was pointed out that rotational buying of value stocks had not had much impact on the returns of active funds, suggesting that these investors could suffer if they chased stocks such as large technology companies and renewable energy stocks at high positions.
Barclays strategists wrote: "the portfolio still consists mainly of long-term growth assets, so if the macroeconomic / inflation situation continues to improve, assets are vulnerable to losses. Value stocks with lower valuations, which are sensitive to the economy and can hedge against the impact of inflation, seem to be a natural choice for the portfolio. "