Finding Small Cap Opportunities in the Economic Recovery on TD Ameritrade Network—Royce
article 03-30-2021

Francis Gannon Talks Finding Small Cap Opportunities in the Economic Recovery on TD Ameritrade Network

Co-CIO Francis Gannon discussed on TD Ameritrade Network’s Morning Trade Live why small caps should do well in a strengthening economy.


Co-CIO Francis Gannon recently joined host Oliver Renick on TD Ameritrade Network’s Morning Trade Live to discuss how the recent reversion to the mean is allowing Royce PMs to find more small cap opportunities.

Watch the video here.

Francis explained he’s not worried about the current pullback in March 20201 that’s followed the Russell 2000 Index’s 130%-plus gain off the bottom on March 18, 2020, as he believes it allows for the opportunity to find new small cap opportunities. He added that the asset class has historically done well in economic rebounds and therefore should benefit from a strengthening economy, especially if GDP tops 5%.

In addition, he thinks earnings growth will bode well for small caps, particularly in high-quality and other fundamentally strong small caps cyclicals, despite higher inflation and higher intertest rates.

“I think the opportunity in small caps here is the opportunity to continue to grow in terms of returns,” he said. “I think small caps will do better than other asset classes here, specifically large cap. History shows us that.”

Watch the video here.

Learn more about Francis Gannon here.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of March 26, 2021 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.

Hilton Worldwide Holdings Inc. is not held in any Royce Funds portfolios as of 12/31/20.

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.

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 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.)



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