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What are Small Caps?

In simple terms, Small Caps are companies with small market capitalisations. While what constitutes ‘small’ varies from market to market, they tend to share a number of characteristics across markets, in particular, they tend to be poorly covered by analysts and offer the potential for both high risk and high growth.

Why consider active exposure to Small Caps?

Investors have often overlooked smaller companies, despite their accounting for 15% of the global equity investment universe  by market cap*. However, investors are increasingly recognising their potential benefits as part of a core allocation.

Due to their specialised nature, Small Caps tend to be covered by fewer analysts and, thus, are more likely to be mispriced. Also by nature of their flexibility and market economics, innovative Small Caps are often positioned towards the higher growth areas of the economy and themes of innovation. 

Our approach to active Small Cap investing

With more than 20 years of experience in Small Cap investing, both our global and European-focused teams combine Small Cap expertise with deep company insights formed through exhaustive management meetings and a bottom up approach to stock selection. Our strategies cover Global, UK and Europe.

* Source: Bloomberg, Datastream, Factset and JP Morgan, December 2016.

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This page is for informational purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment, legal or tax advice. The strategies discussed herein may not be available in all jurisdictions and/or to certain types of investors. Opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. No guarantee, warranty, or representation is given as to the accuracy or completeness of this material. Reliance upon information in this material is at the sole discretion of the reader. This material does not contain sufficient information to support an investment decision.

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