Summary

• Small-cap stocks delivered mixed results during the first quarter as value stocks were favored over growth.
• Investors entered the year with optimism around the outlook for the economy with inflation subdued and the prospects for a more accommodating US Fed that appeared poised to lower interest rates.
• Despite heightened uncertainty surrounding the impact of the shock from higher energy prices, we remain broadly constructive on the cyclical areas of the stock market.
• The healthcare industry remains the largest sector in the US, with total expenditures exceeding $5 trillion and accounting for 18% of gross domestic product.

Market Overview

Small-cap stocks delivered mixed results during the first quarter as value stocks were favored over growth. The Russell 2000® Growth Index (down 2.82%) produced positive returns in only three sectors. The Russell 2000® Value Index (up 4.96%) produced positive returns