Can the Rotation from Small-Cap Growth to Value Last?—Royce
article 05-27-2021

Francis Gannon in International Investment : Can the Rotation from Growth to Value Last?

Co-CIO Francis Gannon discussed recent strong earnings for small caps and why he believes the asset class will see positive results based on historical data.


Co-CIO Francis Gannon recently bylined an article in International Investment titled “Why US Small Caps are Set to Add Value” detailing why he believes the recent leadership rotation from large cap to small cap is sustainable.

Read the article here.

Francis detailed historical data by looking at average three-year returns for the Russell 2000 following its 10 strongest four-quarter periods, which was 11.9% versus 10.3% for all quarterly-rolling three-year returns since inception. As a result, Francis believes this historical pattern should hold.

In addition, Francis said re-openings, fiscal and monetary stimulus, and pent-up consumer demand caused by the global economic recovery is stimulating a revitalization for small cap-vale and cyclical stocks.

Read the article here.

Learn more about Francis Gannon here.

Important Disclosure Information

Mr. Gannon’s thoughts and opinions concerning the stock market are solely their own and, of course, there can be no assurance with regard to future market movements. No assurance can be given that the past performance trends as outlined above will continue in the future.

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.

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 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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