UBS Wealth Management is taking a new look at value in a strategy shift, shying away from growth stocks.
Jeremy Zirin, the firm's head of investment strategy, recently upgraded large-cap value stocks. Both the S&P 500 Value Index and Russell 1000 have been up just two percent so far this year, compared to their broader counterparts, which are up more than seven percent.
"One interesting trade that we've implemented as of last week is that we've gone value over growth large cap U.S. equities," Zirin said on Wednesday's "Trading Nation."
He cites the record-breaking moves in the Nasdaq, where technology stocks have grabbed big gains. The index has only seen three negative sessions so far this month.
"Valuation is now more attractive given the fact that value has underperformed and earnings actually were better in the first quarter for value than for growth," he said.
Overall, Zirin remains "reasonably positive" on the U.S. market and expects the S&P 500 to reach 2,450 over the next six months. His forecast comes as the S&P closed at a fresh record high, recording its fifth positive session in a row.
"We're likely to see between 2.5 and 3 percent GDP growth on a quarter-over-quarter basis over the course of the rest of the year. That should also provide a tailwind for value," said Zirin.
His newest call also involves picking up a couple of frequently talked-about laggards.
"What's been left behind in this market has largely been energy and financials. Energy and financials make up almost 40 percent of the value index, and we think the risk reward around those two sectors look quite attractive," Zirin said.