Citi Research's recent analysis suggests that the Growth investment style is poised to outperform in 2025, driven by its low macro risk exposures and diverse sector tilts. Despite the U.S. equity market's extended long positions, which are at a multi-year high, Growth's reasonable valuation and secular tailwinds make it an attractive option. The market is currently pricing in a "goldilocks scenario" of lower interest rates and narrowing credit spreads, but Citi warns of increased macro uncertainties, particularly concerning long-term interest rates. While Price Momentum has been the best-performing style in 2024, Citi advises caution due to its positive exposure to 10-year yields, and notes that Value factors have struggled amid rising oil prices and yields.
The SPDR Portfolio S&P 500 Growth ETF (SPYG) experienced a slight decline, falling 0.48% to $90.94 as of 3:00 PM on Tuesday, December 17.