Small cap stocks had an outsized response to the outcome of the US election while trading patterns of exchange-traded funds reversed in January from the end of last year.

Mat Lystra, senior research analyst at FTSE Russell, the index business of the London Stock Exchange Group, said in a blog that US equity markets and small cap stocks in particular, posted the largest post-election gains in recent history. He said in a blog: “The ‘Trump Bump’ was the highest at 14.3% for the Russell 2000 Index of any presidential election period since its inception in 1979.”

Lystra continued that small cap stocks tend to be more sensitive to domestic policy changes so it makes sense that they had an outsized response to the outcome on November 8. By sector, financial services and energy experienced the highest post-election bounce of 17% and 25.9% respectively. The market is anticipating a period of enhanced profitability, particularly for banks, as the administration has said it plans to loosen financial regulation.

“If Trump fulfils his promises to reduce regulations and lower corporate tax rates, perhaps the ‘Trump bump’ won’t be fleeting after all—but for now, those remain campaign promises that are waiting to be met,” added Lystra.

WisdomTree, the ETF issuer, said in a blog that  investors piled into leveraged long US equities at the expense of short positions in January, a reversal from the end of last year, due to expectations that the administration will unveil a series of pro-growth policies.

Nick Leung, research analyst at WisdomTree, said demand for long US exposure in January into the 3x Long S&P 500 ETF was more than the total net flows in (leveraged and short) US equity ETPs for the whole of 2016.

“In total, flows into leveraged long US equities came in at almost $54m in January, while $4.6m came out of short positions,” said Leung. “This compares with withdrawals of $40m from long positions (and inflows of $14.6m into short positions) in the final two months of 2016.”

In addition, notional volume executed on the Tradeweb European-listed ETF marketplace significantly increased following the election. However there was a reversal in investing patterns in January.

“The post-US election shift into North American equity ETFs slowed down to a ‘buy’ ratio of 53%, after a high of 62% in December 2016,” added Tradeweb. “Europe equities saw strong ‘buying’ of 65% in January – up from 44% in November – and was the most popular ETF category during the month with more than €3.2 billion in notional.”

The most pronounced change last month was in emerging markets debt ETFs while the volume of Aggregate Bonds, which invest in both government and corporate debt securities, increase to €630m, up €248m from November, according to Tradeweb.

David Harris, senior investment director, fixed income at Schroders, said in a report: “The market is pricing in the risk of higher interest rates in the future due to uncertainty surrounding government spending policies worldwide, many of which have potentially inflationary consequences.”

Schroders continued that in equities, the US market’s gain of 6.2% since the election dwarfs those in Europe and Japan.

Alex Tedder, Schroders’ global equities fund manager, said in a report: “2017 is all about Trump. Will he execute, or not? Now he needs to deliver, and he needs to deliver on multiple fronts. If he does, the US is likely to do well, and continue to lead global markets higher.”

Tedder added there are opportunities at a stock level despite the uncertainty. He pointed to the disruptive impact from technology enablers and new platforms and an improving outlook for banks.