Value stock ETF attracted a whopping $6.9 billion on the eve of the Fed rate cut, while technology stocks were being sold off!

According to the Zhitong Finance and Economics APP, as the market anticipates the upcoming rate cut by the Federal Reserve, investors are shifting towards undervalued stocks, hoping for their recovery. Based on data from Bloomberg Industry Research, value stock-focused Exchange-Traded Funds (ETFs) have attracted $6.9 billion in inflows from September to date, making it the best-performing month of the year. At the same time, growth stock ETFs that typically invest in large companies in the technology industry have seen a decrease of around $13 million in funds.Figure 1Among the funds flowing into value ETFs in September, more than half of the funds went to the iShares MSCI EAFE Value ETF (EFV.US), which has benefited from BlackRock's adjustment of its model investment portfolio strategy. BlackRock has reduced its investments in U.S. stocks and growth stocks, favoring value stocks and fixed-income products instead.Tushar Yadava, a strategist at BlackRock, commented on EFV, saying, "We believe this ETF has the best profit potential." While they still have a positive view on growth stocks, they are balancing their investments by increasing the proportion of value stocks in the portfolio.Other outstanding value funds in September include the $25 billion SPDR Portfolio S&P 500 Value ETF (SPYV.US), which saw a record high inflow of funds last week. Additionally, the $3.2 billion iShares Russell Top 200 Value ETF (IWX.US) attracted over $800 million in funds this month.It is reported that Wall Street traders are selling off tech stocks, which were the main driving force of this year's bull market. With the market expecting the Federal Reserve to lower borrowing costs to stimulate economic growth, investors are turning to traditional industries such as utilities and real estate to find new growth opportunities.Over the past two years, tech giants like NVIDIA and Microsoft have led the stock market, attracting a large number of investors. However, due to concerns about slowing economic growth and the possibility of the Federal Reserve starting rate cuts as early as this Wednesday, traders are shifting towards industries like real estate, utilities, and consumer staples.Since the S&P 500 index peaked on July 16th, the so-called "Big Seven" tech stocks - NVIDIA, Microsoft, Apple, Alphabet Inc., Amazon, Meta Platforms, and Tesla - have mostly seen declines, with the Bloomberg Big Seven Tech Stock Index falling by 5.3%. In contrast, broader stock benchmark indices have fallen by less than 1% during this period, mainly due to the overweighting of these fast-growing tech giants in the S&P index. However, industries like real estate and utilities have significantly outperformed this index, rising by 11% eachThese data also include the rise of the S&P 500 index last week, with technology stocks leading the way.Figure 2Matt Maley, Chief Market Strategist at Miller Tabak + Co., said, "This positive market performance seems to indicate that investors are now more confident that the upcoming rate cuts will help economic growth next year and contribute to a more balanced profit growth."The market generally expects the Federal Reserve to start a rate-cutting cycle on Wednesday, with a possible rate cut of 50 basis points. On Tuesday morning, despite the latest economic data showing strong U.S. consumer confidence, the market's expectation of a 50 basis point rate cut announcement by policymakers is still around 55%