MGK: A Lot To Gain From A Rate Pivot

Valkyrie Trading Society
Investing Group Leader

Summary

  • A noticeable thing about this relief rally after the banking scares is that the US market has gone ahead in its recovery compared to other markets.
  • A theory on that is that the tech mega-caps are so dependent on their horizon values and already have low WACCs, so changes in risk-free rates make the biggest difference.
  • The demand concerns are lessened in US mega-caps because they're so entrenched.
  • The upshot is that positioning well for a rate pivot comes down to the simple fact that costs of capital matter, and the US markets have the most to gain from a rate reversal.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

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The Vanguard Mega Cap Growth Index Fund ETF Shares (NYSEARCA:MGK) is an ETF with large cap US exposures that would generally be considered growth exposures. Ultimately, the US markets are generally driven by growth issues, so the

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