QVMS - Coiled Tight: Smaller Companies Are Primed For Outperformance
2024-05-09 03:05:00 ET
Summary
- While small-cap companies are ETF’d, passive investing in this group is a sub-optimal strategy for the creation of alpha over the long term.
- In the United States, small- and micro-cap stocks have lagged large- and mega-cap stocks for nearly a decade, based on price returns from the Russell 2000 and the S&P 500.
- The small-cap sector is best approached through an active investment strategy where expertise and a deep understanding of the individual businesses and their risk-and-reward characteristics are necessary for success.
In his keynote speech at the Ben Graham Centre's 2024 Value Investing Conference in Toronto, Jason Zweig , a veteran columnist for The Wall Street Journal , asked rhetorically: "What cannot be ETF'd?"...
Coiled Tight: Smaller Companies Are Primed For Outperformance