Capital Markets: Observations & Insights

Sector Disparities ​ Performance

• In 2017, the technology sector vastly outperformed other sectors of the market both in the U.S. and globally, driven by strong fundamentals • U.S. tax reform and rising interest rates influenced 4Q17 performance with relatively high tax rate sectors outperforming those with lower tax rates or bond-like characteristics

4Q17 Returns (%)

2017 Returns (%)

50

U.S.

World

U.S.

World

10

40

8

30

6

4

20

2

10

0

0

-2

-10

Energy

Utilities

Energy

Utilities

Telecom

Materials

Telecom

Materials

Financials

Industrials

Financials

Industrials

Technology

Real Estate

Health Care

Technology

Real Estate

Health Care

Consumer Staples

Consumer Staples

Consumer Discretionary

Consumer Discretionary

Source: FactSet as of 12/31/17. U.S. represented by S&P 500 and World is represented by MSCI All Country World Index in local currency.

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