Growth and value stocks could get a boost from Russell’s reweighting

The second half of the year could see an uptrend in both value and growth.

VettaFi’s Todd Rosenbluth believes value stocks, which have lagged the market so far, could get a boost from one of the biggest Wall Street events of the year: the annual rebalancing of the FTSE Russell.

“It’s worth paying attention to value,” the firm’s head of research told CNBC’s “ETF Edge” this week. “It feels like … (for) a long time, growth has outpaced value.”

On Friday, the Russell indexes underwent their annual rebalance to reflect market changes as companies grow and relocate. The iShares Russell 1000 Growth ETF is up 20% so far this year, while the iShares Russell 1000 Value ETF is up nearly 6%.

“We believe there is room for both growth and value in a broader portfolio – it’s just that people tend to lean more toward growth in the second half of the year,” he added. “There have been times when the pendulum has swung back in favor of value.”

Fiona Bassett, CEO of FTSE Russell, told ETF Edge that the indices are designed to reflect the nature of the market.

“One of the benefits of the Russell franchise in general is our ability to offer a variety of investment vehicles,” she said. “For those who want concentrated exposure to value or growth, we have the indices that make that possible.”

According to FactSet, the Russell 1000 Growth ETF’s three largest holdings as of May 31 are Microsoft, Apple and Nvidia. The Russell 1000 Value ETF’s largest holdings, on the other hand, are Berkshire Hathaway, JPMorgan Chase and Exxon Mobil.