VUG - Inflation is at 40-year highs opening the door for value ETFs to outperform growth

Inflation fears continued to grow on Thursday after the consumer price index rose by a higher-than-expected 7.5% in January. The high rate of price increases emphasized the difference between growth and value funds. In a rising rate environment, in which the Federal Reserve gets aggressive to tamp down inflation, value ETFs have the opportunity to outperform growth. The latest inflation reading marked its highest level in 40 years and came in above the 7.3% figure that economists had expected. With surging prices, investors are eyeing the Federal Reserve to potentially get more aggressive on normalizing monetary policy, which will affect particular exchange traded funds. Growth and value ETFs find themselves in the crosshairs of inflation. To combat the rise in market prices, investors will look to the Fed to raise interest rates to curb the continued increase in consumer prices.  As interest rates rise, they affect the value of future cash flows,

For further details see:

Inflation is at 40-year highs, opening the door for value ETFs to outperform growth