Capital Markets: Observations & Insights

I

Fundamentals > Politics The Election

I • Domestically focused companies that should have benefitted from the administration’s policies have actually underperformed while the most innovative companies outperformed

‒ Investors may want to consider secular growth companies irrespective of politics

II

Most Innovative Companies

15%

9%

10%

III

5%

0%

IV

-6%

-5%

-10%

High Domestic Exposure

Cumulative Excess Return

V

-15%

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Jun-17

Jun-18

Jun-19

Feb-17

Feb-18

Feb-19

Dec-16

Aug-17

Dec-17

Aug-18

Dec-18

Aug-19

VI

Source: Alger using FactSet Alpha Testing. High domestic exposure is companies in highest quintile of U.S. sales as percent of total sales in S&P 500. Most Innovative Companies are the highest quintile of R&D % of sales in the S&P 500. Both are normalized for sector exposure. The performance data quoted represents past performance, which is not an indication or a guarantee of future results.

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