Christopher Dhanraj – Blackrock
What’s Behind The Small-Cap Boom?
Summary: Small-cap stocks have outperformed the broader market recently because of three key factors. First, tax reforms provide a greater benefit to small-cap companies which derive the majority of their business from domestic operations. Second, strong domestic economic growth has led to positive earnings expectations for small-cap companies. Lastly, a stronger dollar has less of a detrimental effect on small-cap earnings because they have less exposure to foreign currencies.