When panning across the US styles screen of our Trend Analyzer tool, one dynamic has become clear over the past week: growth has trumped value. Across the board, most ETFs in this screen are overbought as of yesterday’s close trading a full standard deviation or more above their respective 50-DMAs. However, it is growth oriented ones that have gotten the most extended thanks to outsized year-to-date in addition to 5-day gains.  While those growth ETFs like the Vanguard Growth ETF (VUG) have risen to new highs, value and dividend ETFs have mostly pulled back in the short term.
Taking a sample using the Vanguard family of ETFs, again growth (VUG) is the top performer in the past week and this year while value (VTV) is closer to the bottom of the list.  Meanwhile, the Vanguard Dividend Appreciation ETF (VIG) has likewise fallen in the past week albeit by a more modest amount. As shown below, the relative strength lines of growth versus value and dividends have tracked one another closely this year.  In both scenarios, growth has outperformed value and dividends throughout most of 2024 with a notable swing higher since early last week.
Impressively, that favoritism towards growth in the past week has been historic. Below we show the rolling 5-day relative strength of growth (VUG) versus dividends (VIG) going back to 2006 when the Vanguard Dividend Appreciation ETF (VIG) first began trading.  That current short-term stretch of relative strength in growth ranks as one of the most dramatic on record.   The last time there was more than 4 percentage points of outperformance in growth versus dividends was over a year ago in the spring of 2023. Looking back further, there have been multiple other comparable instances since the COVID crash, but there are zero examples before 2020.
For value, that relative weakness versus growth is again at historic levels for a one-week span. There has been a five percentage point difference between the two over the past week. As with growth versus dividends, that is the widest degree of outperformance since the spring of 2023 with many other occurrences since early 2020. One difference, however, is that there are also a couple of examples to draw from back during the Financial Crisis years (the first in October 2008 and the second in March 2009).More By This Author:Biggest Winners And Losers Since The Election
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