The beginning of a new quarter brings with it the inevitable request for a discipline-specific outlook. That’s especially true at the beginning of a new year. As you’ve seen in videos published in the past two weeks, many of my colleagues are “cautiously optimistic.” From a small value perspective, we acknowledge the many reasons for caution, but we also see opportunity.
Those of you familiar with the relative performance of the small value category versus the small growth category over the past few years might question why I say this. Although small growth has had the upper hand for several years, I believe small value is just coming out of a normal period of underperformance. And there are many indicators to support that—from the tendency of value stocks to be more sensitive to changes in growth rates or the prospect of less regulation and better loan growth.
Want to hear more about my thoughts on why I’m optimistic, and what we look for in high-quality businesses? Check out the video below.
The opinions expressed are those of Miles Lewis and are no guarantee of the future performance of any American Century Investments portfolio. For educational use only. This information is not intended to serve as investment advice.
Historically, small cap stocks have been more volatile than the stock of larger, more-established companies. Smaller companies may have limited resources, product lines and markets, and their securities may trade less frequently and in more limited volumes than the securities of larger companies.