In focus

The case for global small company investing in an era of disruption

Small-capitalization companies (‘small caps’) offer the potential for higher returns, although not without risk. The wide dispersion of returns among small caps and the relative inefficiency of the market also give active investors greater opportunity to add value compared with investing in larger companies. However, investors are also being drawn to the market for another reason – the ability to navigate and profit from the increasingly disruptive environment in which we live. More cumbersome, larger, older companies may not always be best equipped to adapt to such rapid change. Small caps, in contrast, can be more nimble and are often the driving force behind disruption.