Francis Gannon Making the Case for Small-Cap on TD Ameritrade—Royce
article 06-13-2022

Francis Gannon Making the Case for Small-Cap on TD Ameritrade

While small-cap earnings estimates are rising despite uncertainties, Co-CIO Francis Gannon makes his case for the asset class, highlighting its opportunities.


Co-CIO Francis Gannon was recently a guest on TD Ameritrade’s Morning Trade Live with Oliver Renick discussing how relative valuations for small-caps are at their lowest in twenty years verses their large cap sibling.

Watch the video here.

Francis said that the average small-cap stock was down around 45% from their respective 52-week high, adding that small-caps have outperformed large caps for the last three years. Though stocks are currently very volatile, he noted that the typically do well over the subsequent three-year period—with small-cap often leading.

In addition, he noted that small-cap value is outperforming growth, and Royce PMs are finding select opportunities in the Industrials, Consumer Discretionary, and Health Care sectors, among others.

Watch the video here.

Learn more about Francis Gannon.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of June 7, 2022 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.

The performance data and trends outlined in this presentation are presented for illustrative purposes only. Past performance is no guarantee of future results. Historical market trends are not necessarily indicative of future market movements.

Sector weightings are determined using the Global Industry Classification Standard ("GICS"). GICS was developed by, and is the exclusive property of, Standard & Poor's Financial Services LLC ("S&P") and MSCI Inc. ("MSCI"). GICS is the trademark of S&P and MSCI. "Global Industry Classification Standard (GICS)" and "GICS Direct" are service marks of S&P and MSCI.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and / or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. All indexes referenced are unmanaged and capitalization-weighted. 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 CBOE S&P 500 Volatility Index (VIX) measures market expectations of near-term volatility conveyed by S&P 500 stock index option prices. It is the square root of the risk-neutral expectation of the S&P 500 variance over the next 30 calendar days and is quoted as an annualized standard deviation. The Nasdaq100 is an unmanaged, capitalization-weighted index. It measures the performance of the 100 largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. The S&P 500 is an index of U.S. large-cap stocks selected by Standard & Poor’s based on market size, liquidity, and industry grouping, among other factors, and includes reinvested dividends. 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.)



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