Mid-Year Small-Cap Review And Outlook by Francis Gannon, The Royce Funds

Francis Gannon, Co-Chief Investment Officer at The Royce Funds, discusses major transitions in the small-cap space, specifically the resurgence of value and the importance of earnings and fundamentals, with financial journalist and television host Liz Claman.

Courtesy of Asset.tv. All Rights Reserved.

“In small caps growth has outperformed value in five of the past six years, something that’s been unprecedented. So now we’re seeing value take its resurgence, if you will, within the small cap space. And I think that’s significant,” said Co-Chief Investment Officer Francis Gannon on Asset.tv’s Mid-Year Outlook.

“And I think it’s something that investors should pick up on and thinking about their asset allocation to small caps.”

On June 28, 2015, Francis joined financial journalist and television host Liz Claman for the Asset TV Mid-Year Outlook Live webcast and discussed major transitions in the small cap space.

“You’ve seen this non-earner bubble which was important in the Russell’s run up, has burst, and you’re actually seeing the importance of earning, fundamentals matter again, which I think is really important in the small cap space.”

Francis also discussed where he sees opportunities in the small-cap space today, saying, “Small caps that have economic cyclicality to their business is where the opportunity set is from our perspective today. We tend to measure businesses, you know, we’re looking for that crossroads, if you will, of quality and valuation.”

Francis Gannon has 23 years of investment industry experience. He joined Royce in 2006.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of June 28, 2016 and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

Although dollar cost averaging can be a beneficial method for long-term investing, it does not guarantee a profit or protect from loss in a declining market. All investing involves risk, including the possible loss of principal, and there can be no guarantee that any investing strategy will be successful.

Investments in securities of small-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see “Primary Risks for Fund Investors” in the prospectus.)

Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell© is a trademark of Russell Investment Group. The Russell 2000 Index is an index of domestic small-cap stocks that measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. The Russell 2000 Value and Growth indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. Smaller-cap stocks may involve considerably more risk than larger-cap stocks. (Please see “Primary Risks for Fund Investors” in the prospectus.)

Small-Cap, Francis Gannon
Image source: Video Screenshot