Yet the enthusiasm for financials may be limited only to a certain kind of investors, according to a Goldman Sachs research note from chief US equity strategist at Goldman Sachs
David Kostin’s team.
“Since the election, Financials have rallied by 25% led by a 33% surge in Banks, outpacing the 12% rise in the S&P 500,” the team noted.
Talking about exposure to financials, the team noted, “hedge funds have a low 11% net exposure to Financials while large-cap core and growth mutual funds overweight the sector.”
Highlighting a potential risk behind the rally in financials, Kostin’s team says, “a delay in tax cuts until 2018 will postpone the accretive earnings impact incorporated into many current year EPS forecasts.”
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