The Saratoga Small Cap Portfolio’s primary detractor from performance was an underweight in Financials, which was the best performing sector in the fourth quarter. The Portfolio’s overweight in the Industrials sector and underweight to Consumer Staples contributed to relative performance.
Following the presidential election, the incoming administration continued to advocate a renewed focus on domestic oriented fiscal stimulus and infrastructure investments, which may result in a strengthening of the US dollar. Thus, prospects for improved US economic growth helped foster a risk-on environment, which favored many domestic small cap stocks. In addition, rising bond yields and the prospects for better economic growth ahead improved the earnings potential of many small banks. If the Trump administration’s domestic oriented fiscal policies accelerate US economic growth, growth-sensitive small-cap stocks could continue to see strong gains, with small cap stocks reaping the benefits of investors maintaining a high appetite for risk.
Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.
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