During the fourth quarter of 2018, small cap stocks largely underperformed both large and mid cap stocks. The quarter was notable for the sudden heightened volatility and steep drop in prices across all asset classes. There was an emergence of early signs of slowdown in US economic growth, increased trade related tensions with China and its impact on future economic growth and corporate profit growth, and continuing global economic weakness outside the US. In addition, the Federal Reserve, citing strong US employment gains, raised interest rates and maintained a tighter monetary policy posture for the future. Many investors began to anticipate a sooner and faster-than-expected economic contraction and associated corporate profit reduction, and markets repriced asset prices sharply lower. This repricing helped cause an especially sharp fall in prices of small cap company stocks, whose fortunes can find themselves more tied to US economic growth and the level of interest rates than larger cap stocks.
The Saratoga Advantage Trust Small Cap Portfolio was underweight the outperforming Utility, Consumer Staples, and Financial sectors and overweight to the underperforming Industrial sector, hurting the strategy’s relative performance.By contrast, the portfolio’s underweight to the underperforming Energy and Health Care sectors helped relative performance.
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.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Saratoga Advantage Trust mutual funds. This and other important information about the Saratoga Advantage Trust's funds is contained in the prospectus, which can be obtained by clicking here, or by calling (800) 807-FUND, and which should be read carefully before investing. The Saratoga Advantage Trust's funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Saratoga Capital Management, LLC is not affiliated with Northern Lights Distributors, LLC. 1/19 © Saratoga Capital Management, LLC; All Rights Reserved.