Small-Cap Stock Performance During Tariff Concerns—Royce
article 07-18-2019

Steve Lipper On Money Life with Chuck Jaffe

Steve Lipper was a guest on Money Life with Chuck Jaffe radio show to discuss excessive pessimism in small-cap cyclicals.


Senior Investment Strategist Steve Lipper joined host Chuck Jaffe on Money Life to discuss how small-caps are positioned to perform during current trade war and tariff concerns.

Listen to Steve’s appearance here (begins at the 16:56 mark).

Steve explained that small-caps have had mixed performance over the last year largely due to the excessive pessimism that’s built into valuations even though many cyclical companies may boast solid fundamentals. He noted, however, that he believes this will change, allowing small-cap cyclicals to perform well going forward.

He added that credit spreads, interest rates, and the ISM Manufacturing Index are the three macro factors that tend to affect small-cap returns versus large caps most, as they have so far this year.

Listen to Steve’s appearance here (begins at the 16:56 mark).

Learn more about Steve Lipper here.

Important Disclosure Information

The thoughts and opinions expressed in the interview are solely those of the persons speaking as of June 14, 2019 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.

Cyclical and Defensive are defined as follows: Cyclical: Communication Services, Consumer Discretionary, Energy, Financials, Industrials, Information Technology, and Materials. Defensive: Consumer Staples, Health Care, Real Estate, Utilities.

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.

The ISM Manufacturing Index (ISM) monitors employment, production, inventories, new orders and supplier deliveries.

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. The Russell 2000 Index is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 Index. 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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