Unbeatable Investment Strategy: Momentum and Large-Cap Growth Dominate in 2024
In the world of investing, betting against the hottest equity risk factors has proven to be a painful strategy this year. Momentum and large-cap growth continue to outperform in 2024, with the iShares MSCI USA Momentum Factor ETF leading the pack with a 25.6% surge. Large-cap growth is not far behind, posting a 24.7% rise.
These gains are well ahead of the rest of the factor field, showcasing solid premiums over the broad market’s 18.9% advance. The market rally in 2024 has been broad and deep, with risk factors across the board posting gains.
However, not all factors are enjoying the same success. Small-cap value is the weakest performer this year, with just a 4.1% increase. Despite the overall positive trend, the deepest laggards are struggling in comparison.
Analysts believe that momentum and large-cap growth have room to run, as strength tends to attract more strength. Until a significant catalyst shakes up the market, recent history is likely to remain the best guide to the future.
Contrarians have been advocating for a shift towards value and small-cap shares, arguing that opportunities exist for investors to cash in while reducing risk. While momentum and large-cap growth continue to dominate, some believe that the gap between leaders and laggards is too wide to ignore.
For those who believe in contrarian strategies, the dismissal of strength in the laggards can be seen as an opportunity. While the future remains uncertain, taking a fresh look at the downtrodden sectors of the market may be a timely move.
In conclusion, while momentum and large-cap growth are currently leading the pack, exploring opportunities in value and small-cap shares could provide a unique advantage for investors looking to diversify their portfolios and potentially capitalize on undervalued assets.