Can Small-Cap Stocks Help You Beat Inflation?

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.1 • 1.1K Ratings

🗓️ 8 February 2022

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

The small-cap Russell 2000 Index posted an impressive 14.8% gain during 2021, but nearly all of it came in the first quarter. And weakness over the ensuing nine months carried into the first month of 2022, when the index shed 9.7%. Francis Gannon, co-chief investment officer of Royce Investment Partners, notes this frustrating performance came despite generally strong earnings growth for small-cap companies. Gannon joins Real Vision’s Maggie Lake to share his outlook for small caps over the balance of 2022, including the fact that it’s the only major asset class to have outpaced inflation during every decade since the 1930s. And rising interest rates could provide an additional tailwind for small-cap value stocks such as regional banks. Meanwhile, major indexes reflect uncertainty ahead of Thursday’s release of Consumer Price Index data for January, as investors weigh the potential for a 50-basis-point hike by the Federal Reserve. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3HBlVau Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:35.4	Hello and welcome to the Real Vision Daily Briefing.
0:37.6	It's Monday, February 7, 2022.
0:40.0	I'm Maggie Lake and here with me today is Frances Ganon, Co-Chief Investment Officer of Royce Investment Partners.
0:47.2	Hi Frances, welcome to Real Vision.
0:49.2	Hey Maggie, thank you for having me today.
0:50.8	Yeah, I'm excited and it's a great day.
0:54.0	You know, it's been a pretty rough beginning to the year.
0:56.8	I think everyone will agree on a lot of people wondering the direction of activities.
1:00.4	And specifically, the direction of small caps, which is something that I know you focus on.
1:05.2	And we don't get to talk about really in depth enough.
1:07.6	But before we sort of jump into all of that, why don't you give us a little overview of your area of focus
1:13.4	and your investment approach?
1:16.0	Sure, I work at Royce Investment Partners.
1:18.8	We have been around since 1972, really focusing solely on this beautiful, highly inefficient asset class called small caps.
1:29.4	And we have a variety of different approaches to the asset class.
	...

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