The new small: Adding alpha with Micro Cap Stocks

Micro cap stocks are among the investment world’s worst-kept secrets. They have been around as an asset class category since the 1980s, and research has repeatedly confirmed the ad­vantages they offer to investors – most notably a chance to exploit numerous opportunities for greater excess returns.

Micro caps’ size and role in investing have evolved over the years, and their appeal has strengthened. They remain the most structurally inefficient segment of the U.S. equity market, making them a shrewd long-term investment when access is available through good managers with reasonable fees.  This white paper describes how micro caps provide opportunities to obtain growth in places that are not immediately recognizable.