During the fourth quarter of 2017, Technology stocks posted strong performance and the Saratoga Advantage Trust Technology & Communications Portfolio was no exception.
The US tax bill that goes into effect in 2018 lowers the corporate tax rate and changes the United States to a territorial tax system, which taxes only those profits that are earned in the US. We believe that both changes are good for US Tech companies, though the deemed repatriation (and taxation) of profits earned abroad is a negative. A big story over the last decade-plus for Technology companies is their abundant and persistent free cash flow. The value of a company is partially a function of the cash that it generates, so this theme has been supportive of the strong performance of Tech stocks. This strong free cash generation should be enhanced by tax reform, though this is likely well understood by the market.
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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