Investors looking for opportunities in this rising market may want to take a look at U.S. small-cap stocks, according to Nuveen's Saira Malik. “There's still room for this upside, but given the valuation, we need to be cautious,” the company's chief investment officer said Wednesday on CNBC's Delivering Alpha conference. “That's why we're looking at undervalued areas, small-cap stocks that are trading at deep discounts. We need to be more selective.” President-elect Donald Trump tells Vice President Kamala Harris Small-cap stocks outperformed following the win. The Russell 2000 index has soared in the wake of President Trump's victory, gaining nearly 8% since the beginning of November on optimism that tax cuts will help small, domestic-focused businesses the most. The index is up about 17% since the beginning of the year, but it still lags the S&P 500 index, which is up more than 25% year-to-date. Malik sees small-cap stocks as one of the most attractive areas amid a broad rally that has pushed major indexes and valuations to new highs. However, the sector appears to be trading at a 20-year low compared to large-cap stocks, he said. Nuveen had approximately $1.2 trillion in assets under management in March of this year. He added that a strong dollar and deregulation would also bode well for small-cap stocks, which are typically US-bound. Potential tariffs from the new Trump administration and the increased purchasing power of U.S. consumers are another boon for small businesses. “Deregulation will make the world an interesting place because it could potentially allow for more M&A activity, which is also important for small-cap stocks that trade at deep discounts to their counterparts. is positive,” Malik said. The iShares Russell 2000 ETF (IWM), which tracks the Russell 2000, is up 8% this month.
CHOOSE LANGUAGE
SELECT LANGUAGE BELOW
