Small Caps: To Index Or Not To Index

Neuberger Berman profile picture
Neuberger Berman
3.02K Followers
(23min)

Summary

  • We believe small caps span a wide range of characteristics and performance drivers that index funds merely average away but that experienced managers have the potential to exploit.
  • In this report, we explore what we believe are common yet ultimately misguided assumptions about small caps, as well as their potential consequences for small-cap quality, growth, and value investors seeking to generate attractive risk-adjusted returns.
  • Passive investors must accept the averaging of significant disparities across the small-cap landscape, whereas experienced active managers, in our view, have the potential to exploit them.

Small Cap write on sticky notes isolated on Office Desk. Stock market concept

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By Raheel Siddiqui & Amr Hanafy, CFA

More investors are taking a passive approach to small caps. Should they? We believe small caps span a wide range of characteristics and performance drivers that index funds merely average away, but that experienced

This article was written by

Neuberger Berman profile picture
3.02K Followers
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 23 countries, Neuberger Berman’s team is more than 2,100 professionals. For five consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). Tenured, stable and long-term in focus, the firm has built a diverse team of individuals united in their commitment to delivering compelling investment results for our clients over the long term. That commitment includes active consideration of environmental, social and governance factors. The firm manages $323 billion in client assets as of March 31, 2019. For more information, please visit our website at www.nb.com.For important disclosures: https://www.nb.com/disclosure-global-communications  Contact Us: Advisor Solutions (877) 628-2583 advisor@nb.com RIA & Family Office (888) 556-9030 riadesk@nb.com

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