Applying the brakes? Growth stocks expected to slow down after US election regardless of result

High-volatility and small-cap firms possible winners

Investors need to watch out for a slowdown in growth and momentum plays – such as the FAANG stocks – after the US Presidential Election, according to Style Analytics' Damian Handzy, whose research shows that value, high-volatility and small-cap companies are likely to outperform during the months after the result is announced.

This view is shared by several other investment professionals on a longer-term basis, who believe post-election inflationary tailwinds will create "a new generation of winners" and boost the performance of some more cyclical companies, despite the fact many have underperformed their quality growth counterparts for several years. Head of strategy, research and commercials at Style Analytics Handzy's research shows that, in the seven months following US elections during the last nine presidential races, value, small-cap and high-volatility stocks have outperformed their historic seven-mont...