Why we’re sticking with small-caps amid the great reshuffle

T. Rowe Price’s Asset Allocation Committee is maintaining an overweight position in small-cap stocks, citing pro-growth policies, attractive valuations, and lower borrowing rates. Despite the uncertainty surrounding AI’s widespread impact and its potential to disrupt various industries, the committee believes that if productivity gains broaden economic activity, small-caps are well-positioned to benefit. They also hold a bearish outlook on the U.S. dollar, anticipating coordinated efforts to manage Treasury yields.