Market Outlook: Investors shift to value and smallcaps as tech cools
BNN Bloomberg
Value, dividend and smallcap stocks outperform mega-cap tech as investors rotate to cheaper valuations and AI-linked infrastructure plays.
BNN Bloomberg spoke with Whitney Stewart, executive director and client portfolio manager at Sterling Capital, who said the so-called HALO trade — heavy asset, low obsolescence sectors such as utilities, energy and industrials — is benefiting from improving earnings trends and demand tied to AI-related infrastructure.
Read the full transcript below:
ANDREW: For investors looking to broaden their stock portfolios, our guest says there are opportunities in value and dividend payers and small caps, with many still trading at lower valuations compared with the mega-cap tech names. Let’s get more from Whitney Stewart, executive director and client portfolio manager at Sterling Capital. Great to see you, and thanks very much for joining us.
WHITNEY: Good morning. Yes, we believe that this HALO trade — heavy asset, low obsolescence — is pretty interesting. You’re seeing large-cap value, dividend stocks and small-cap stocks in the U.S. up anywhere from five to nine per cent, in a reversal of the winners of the last couple of years — the Magnificent Seven technology trade. So we’re seeing that as an attractive area on a go-forward basis.
ANDREW: Remind us, what are these HALO stocks again?
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