U.S. Small Cap equities are at a critical juncture. Not only has the valuation gap between Small and Large-Cap stocks grown exceptionally wide by historical measures, but numerous Small-Cap macro tailwinds also appear to be gathering force. So, why is active management crucial for navigating this segment? How are reshoring and deglobalization trends influencing these companies, and what does the year ahead have in store for Small Caps.
We believe a strong economy, rebounding industrial activity, improving liquidity and rising animal spirits should continue to support corporate earnings growth and a broadening of the U.S. equity market in the coming year.