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Small-cap stocks were strengthening as traders renewed their outlook on the Trump administration’s pro-growth agenda. In recent weeks, U.S. markets have been roiled over uncertainty concerning President Donald Trump’s ability to push through pro-growth economic policies through Congress as the White House wades through political intrigue. However, the small-cap segment is recovering on expectations that the administration could overhaul the U.S. tax policy.
“Low-volatility stocks have historically offered better risk-adjusted performance than their more volatile counterparts. One possible reason for this is that investors may overpay for highly volatile stocks, which may offer a small chance for a large payout, and neglect more steady-eddy names, which are less likely to offer eye-popping returns, causing them to become undervalued,” according to Morningstar.
XSLV is up nearly 8% year-to-date and more than 6% over the past month.
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