The President didn't help the Growth/FAANG/Momentum crowd this morning with his tweets targeted at Amazon (NASDAQ:AMZN).
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.
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.
Let's also look at 1-month as well as Q1 '18 returns:
IVW: S&P 500 Growth ETF
- 3-month return: +1.81%
- 1-month return: -2.97%
IJS: SmallCap Value ETF
- 3-month return: -1.44%
- 1-month return: +1.37%
While not perfectly negatively correlated, there does seem to be some negative correlation.
Coming into 2018, some Tech and Qs 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.
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.
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 small cap, but the premium was there.
The S&P 500 is testing its 200-day moving average today. The February 9th, 2018, opening low for the S&P 500 was 2.532.69 - that's your line in the sand.
Thanks for reading…