International Small Cap: Hiding in Plain Sight
Overview
Professional investors have long touted the benefits of investing globally in order to expand the opportunity set and diversify the portfolio beyond home country borders. However, investors have largely overlooked a more attractive subset of international equities: small capitalization stocks. Their returns have significantly outpaced large cap international stocks over long time frames with only slightly more risk. There is a case for why small cap international stocks should have a place in every global investment portfolio.