Capital Markets: Observations & Insights

Scale and Growth Rewarded Performance

• Characteristics of large secular growth stocks have done best this year, while last year’s leader, dividend yield, underperformed

2017 YTD Excess Return (%)

3Q17 Excess Return (%)

1.2

1.7

0.8

1.0 0.8

0.4

0.0

0.4 0.3 0.0

0.0

-0.8 -0.8

-0.4 -0.6 -0.6

-1.2 -1.3 -1.5

-1.2

-2.6

-3.1

Market Cap

Market Cap

Book / Price

Book / Price

EPS Growth

EPS Growth

Debt / Equity

Debt / Equity

Price Volatility

Price Volatility

Dividend Yield

Dividend Yield

Trading Activity

Trading Activity

Earnings / Price

Revenue / Price

Earnings / Price

Revenue / Price

Relative Strength

Relative Strength

Earnings Variability

Earnings Variability

Source: FactSet as of 9/30/17 using Northfield defined quantitative factors for the Northfield broad U.S. market database.

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