Time to Downsize? Big Potential in International Small Cap
International small-caps offer a large opportunity set but remain overlooked by some U.S. investors. Historically, these stocks have outperformed international large-caps, and the recent increase in international growth may bode well for returns going forward. International investing risks are somewhat heightened with small-caps; however, in recent years international small-caps have provided correlation benefits while volatility has remained in line with broader international equity indexes. As part of a large and inefficient market with less analyst coverage, international small-caps offer active strategies and opportunity to add alpha.