Our investment team didn’t go into 2017 as raging bulls. If anything, we thought overvalued U.S. stocks might put a lid on investors’ returns. But we did know that there were sectors and companies that looked very likely to outperform—no matter what the market did. One year later, the results are in: Our 23 stocks and funds returned 34%—outperforming the high-flying S&P 500 by more than 10 percentage points. Here’s what worked, and why:
Consumers spent freely
A so-so year for the auto industry still delivered big gains for our best-performing pick, Fiat Chrysler (FCAU), as low fuel prices bolstered sales of its Jeeps, pickups, and other SUVs. And a global pivot away from beer and wine and toward liquor paid off for Pernod Ricard, maker of Jameson whiskey and Absolut Vodka.
Tech was king
Tech was the top-performing sector in the S&P 500. Our best tech picks included LAM Research (LRCX), a provider of equipment for the “flash” memory used in all kinds of devices, and Sony (SNE), whose PS4 game console saw a resurgence, thanks in part to its strengths in live-TV streaming.
Banks cashed in
Rising interest rates and an improving global economy meant big gains for Citigroup (C) and Bank of America (BAC) and even bigger ones for Sberbank of Russia and Singapore’s United Overseas Bank.
A version of this article appears in the Dec. 15, 2017 issue of Fortune, as part of the article “Investor’s Guide 2018 — Stocks and Funds: The All-Tech Portfolio.”