Despite delivering solid absolute returns in recent years, U.S. small-cap equities have consistently trailed their large-cap peers. Although relative valuations have remained compelling for some time, the asset class lacked the fundamental catalysts needed to drive durable earnings growth.
Today, however, those long-awaited catalysts appear to be taking hold—pro-business domestic policy, an easing regulatory environment, and massive capital deployment into AI infrastructure—and we believe small-cap leadership has begun to emerge.
We believe the case for U.S. small-cap equities rests on five pillars:
- Relative Valuations Near Historic Lows
- Earnings Acceleration Unfolding
- AI Infrastructure Powering a Durable Supply Chain
- Higher Domestic Exposure Anchoring Macro Stability
- Diversification Away From Mega-Cap Concentration