The investor opportunities as US SMID premium reduces

Returns "difficult to find"

In a world where anaemic global growth and political uncertainty are restraining an otherwise healthy US economy from producing GDP growth above 2%, returns are difficult to find, writes Hermes Investment Management's Mark Sherlock.

Small- and mid-cap companies, with a higher exposure to the domestic US economy (circa 70% versus circa 50% in large caps) and internal levers to aid their expansion may offer a solution. Market share gains and targeted geographic expansion can offer growth which elude their larger-cap counterparts. Interestingly, the premium typically attached to this structurally higher growth asset class has reduced currently, presenting a potential investment opportunity.  Why risk of US recession is years - not months - away When investing in the small- and mid-cap space, we look for businesse...