Examining The Environment For Microcap Stocks

May 13, 2021 2:10 PM ET, , ,
Franklin Templeton
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Summary

  • Microcap stocks tend to perform well in an expansionary environment due to their high sensitivity to the domestic economy.
  • US microcap stocks, as measured by the Russell Microcap Index, have provided strong absolute returns since 2000, outperforming their large-cap peers in the Russell 1000 Index.
  • I believe that successful long-term investing in this space requires a focus on higher-quality companies and an adherence to value principles.

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Oliver H. Wong, CFA, Portfolio Manager, Research Analyst, Franklin Mutual Series

The smallest companies in the market may be overlooked by many investors, but can offer big potential. Here, we posed some questions about micro-capitalization (microcap) stocks to

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