European small caps offer income and growth
European small cap stocks have outperformed their large cap peers so far this year. Among the drivers of better performance are their exposure to industrial onshoring trends, the tailwind from merger and acquisition activity on cheaper valuations, and the opportunity to ride on the infrastructure spending wave.
Damien Kohler, Head of European Small Cap Equities tells Daniel Morris, Chief Market Strategist, that small caps can prove positive for investors pursuing an active barbell strategy of a strong income-oriented approach combined with identifying underpriced potential for growth.
“While it’s important to be selective in small caps, there is a breadth of opportunities to explore. We have the flexibility to diversify the portfolio and allocate capital to companies with the best balance between valuation, growth and earnings visibility.”
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