During the third quarter of 2018, small cap stocks, as an asset class, largely underperformed large and mid cap stocks in the US. US economic and corporate profit growth remained strong during the quarter, supported by consumer and business sentiment. However, the broadening of the scope and breadth of trade tariffs against China and their retaliation remained a cause for worry. Signs of firming inflation and projected intentions of the Federal Reserve to fight that inflation by raising rates, coupled with concerns about a potential slowdown in future economic growth, prompted many investors to prefer more profitable larger companies as opposed to growth- and rate-sensitive smaller cap companies. Going forward, if domestic-oriented fiscal policies are implemented in a manner producing US economic growth acceleration, retaliatory global trade actions do not spread widely to domestic economic activities, and interest rates do not rise dramatically, then growth-sensitive small cap stocks could continue to see strong gains. There are, however, significant potential headwinds.
In the Saratoga Small Cap Portfolio, Healthcare and Technology stock selections outperformed, while selections in Financials and Energy underperformed. Though other sector positionings were favorable, the Portfolio’s underweight to Healthcare as a sector detracted from 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. 10/18 © Saratoga Capital Management, LLC; All Rights Reserved.