{"id":7653,"date":"2018-04-02T17:08:56","date_gmt":"2018-04-02T17:08:56","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7653"},"modified":"2018-04-02T17:08:56","modified_gmt":"2018-04-02T17:08:56","slug":"style-box-update-is-growth-momentum-investing-moving-out-of-favor","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7653","title":{"rendered":"“Style Box” Update – Is Growth \/ Momentum Investing Moving Out of Favor ?"},"content":{"rendered":"
\"\"<\/a>
Click to enhance<\/figcaption><\/figure>\n

 <\/p>\n

The President didn’t help the Growth\/FAANG\/Momentum crowd this morning with his tweets targeted at Amazon.<\/p>\n

Looking at the above table, as of this weekend, it looks like Growth is maintaining its “alpha” over Value, although large-cap is seeing less of a premium than small-cap.<\/p>\n

However, what is somewhat deceptive about that data, is the January ’18 style was very similar to 2017’s out-performance, the worm has started to turn in the last 60 days.<\/p>\n

Let’s use two examples, the SP 500 Growth ETF (IVW) versus the small-cap value ETF (IJS):<\/p>\n

Let’s also look at 1-month as well as Q1 ’18 returns:<\/p>\n

IVW: SP 500 Growth ETF<\/strong><\/em><\/p>\n

    \n
  • 3-month return: +1.81%<\/li>\n
  • 1-month return: -2.97%<\/li>\n<\/ul>\n

    IJS: SmallCap Value ETF\u00a0<\/strong><\/em><\/p>\n

      \n
    • 3-month return: -1.44%<\/li>\n
    • 1-month return: +1.37%<\/li>\n<\/ul>\n

      While not perfectly negatively correlated, there does seem to be some negative correlation.<\/p>\n

      Coming into 2018, some Tech and Q’s were sold and some IJS bought just from a “reversion to the mean” perspective, after tech and large-cap growth were up around 30% in 2017.<\/p>\n

      As the 2nd quarter starts, look for Tech\/Growth\/FAANG\/Momentum to lose that performance premium and look for both the smaller-caps and Value to start to close the performance gap.<\/p>\n

      Note for the 12\/31\/17 column, the performance premium Growth held over Value for the full-year 2017. It was less dramatic in the mid and smallcap, but the premium was there.<\/p>\n

      The SP 500 is testing its 200-day moving average today. The February 9th, 2018 opening low for the SP 500 was 2.532.69 – that’s your line in the sand.<\/p>\n

      Thanks for reading…<\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

        The President didn’t help the Growth\/FAANG\/Momentum crowd this morning with his tweets targeted at Amazon. Looking at the above…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[141,142,169],"tags":[],"class_list":["post-7653","post","type-post","status-publish","format-standard","hentry","category-growth-v-value","category-style-analysis","category-technical-analysis"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7653"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7653\/revisions"}],"predecessor-version":[{"id":7657,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7653\/revisions\/7657"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}