Growth has crushed value over the past decade. Can that dominant trend continue to persist? Christian Fromhertz of Tribeca Trade Group answers the question, reviews the charts and highlights which ETF to trade, in this interview with Brian Price. Filmed on November 7, 2018.
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Christian Fromhertz On Finding Value | Trade Ideas | Real Vision™
Welcome to Trade Ideas. I am Brian Price, joined today by Christian Fromhertz from the Tribeca Trade Group. Christian, great to have you with us.
Great to be here.
So today we're talking growth versus value. What are you seeing right now?
Yeah, sure, and really the last couple of years it's been a pretty nice trend, where growth has outperformed value. Right? I mean, I think you could have stayed in growth for the most part. And what's happened the last couple months is I think investors got a little bit too complacent in growth.
People really kind of loaded the boat. It's been performing very well. And then all of a sudden, we've gotten a pretty decent sell-off in growth. So what started to happen over the last month is value has outperformed. And you could see that if you map a chart out between growth and value. You could actually see that value is just starting to tick up a little bit. And money is starting to be put back to work.
And what I've seen analyzing ETF fund flows is that there's been a pretty decent escape out of growth. And I think investors started to realize, hey, I really under own in value. And they're starting to pile into value at this point.
When it comes to misconceptions in the ETF world, what are you looking at right now, as far as it relates to the world of passive versus active management?
Yeah, sure, and that's a big debate. And we hear that oftentimes when we talk about ETFs. We hear, oh, it's passive, passive management. But really from how I see the fund flows and how I see a lot of investors positioning in them, they use it more of as an active basis, especially when we're talking about getting into different groups. You could do that very quickly.
So the accessibility is very quick. We also see that a lot in the international. I think portfolio managers, if they want to quickly get into international developed, or international emerging, it's a lot quicker to get in and out of these international areas, especially multiple countries by doing it via ETF.
So I'm really in the camp that ETFs are used actively.
So Christian, as far as inflows and outflows, what's some of the data you're looking at right now?
Yeah, it's been really interesting. And they've been a pretty good indicator. What we're seeing is over the last couple weeks, really risk off. We've seen a lot of inflows going into short term treasury bonds. So believe it or not, it's things like, I'll give you a couple tickers. It's SHY, BIL, BSV. These are all really short term places to kind of hide your money. Now, you can get a little bit more yields. Because we are seeing like, about a 1.6 to 2% percent yield, depending on the ETF. But if you're looking at in terms of flows, really pre-election, people have really taken money off the table and gone into these areas like the T-bills ETF, which has seen in one week about $1.5 billion of inflows.
And then also, there's been a big pullback in tech. You know, of course, the tech sell off started a couple weeks ago. But it's been pretty steady unwinding. Just last week, they kind of reached I would say, almost a capitulation, where we saw $2.5 billion taken out of tech ETFs.