Taking a long view on small caps

Size does not matter

Stock markets have rallied amid an uncertain macroeconomic background - but it has been a concentrated group of mega-cap stocks that are behind most of the S&P 500’s nearly 8% rally year-to-date.

In fact, it is the narrowest leadership in a rising market since the 1990s. As the Q1 earnings season unfolds, many of the largest tech companies are delivering positive earnings surprises. A focus on efficiency, alongside positive narratives on the outlook for the technology sector - such as the prospect for lower interest rates, growth of cloud and generative artificial intelligence - has spurred investor sentiment. FTSE Small Cap set to compete with FTSE 100 on dividends in 2023 So far, almost half of US and one-third of European companies have reported. Earnings growth is la...