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 S&P 500's extended long positions reaching multi-year highs, Growth's reasonable valuation and secular tailwinds make it an attractive option. However, the U.S. equity market is currently pricing in a "goldilocks scenario" of lower interest rates and narrowing credit spreads, which could be disrupted by 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 sensitivity to 10-year yields, and Value factors have struggled amid rising oil prices and yields.
The ProShares Ultra S&P500 (SSO) ETF experienced a decline, dropping 1.10% to $98.13 as of 3:00 PM on Tuesday, December 17.