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Insight 24.05.2017

Active in small caps

Active in small caps

Opportunities through selected regional exposure


Key points

  • Small and mid-cap companies often demonstrate strong growth potential, notably where they sustain high level of innovation, which is the foundation for maintaining these higher growth rates.
  • The segment tends to be less covered by the analysts' community and dedicated portfolio managers can add value by detecting hidden gems through the investment universe. 
  • Investing in small and mid-caps means believing in the entrepreneurial mind-set, aligning with the founding partner’s drive. 
  • As an Active Manager, UBP has dedicated substantial resources to this segment, covering three of the largest markets. 
  • We believe that a well balanced portfolio should opt in a long-term allocation to the small-and-mid caps segment. 
  • The change in U.S. corporate tax regime would be very supportive for small and mid-caps, which tend to be more impacted than large caps. 
  • Swiss Small & Mid Caps' international exposure and high CFROIs offer a quality investment opportunity, globally.

The global picture for equities has been rather positive so far this year, with equity markets benefitting from accelerated earnings growth. Since the beginning of 2017, with EPS growth estimates at 13% compared to 2% in 2016, global equity markets have started to show signs of a rebound. This recovery theme was supported by expectations of future investments in infrastructure and manufacturing, resulting from market anticipations of the "Trump trade".

Consequently, we have also seen positive performances in small and mid-caps, though diverging within regional markets, between the U.S., Europe and Switzerland. We would like to highlight why small and mid-caps are an appealing investment case, how UBP has tackled this dynamic asset class and what our preferences are in this market.

Read the White Paper

SOUSSAN Benjamin 150x150.jpg

Benjamin Soussan
Investment Specialist

EYSSAUTIER Jean-Luc 150x150.jpg

Jean-Luc Eyssautier
Investment Specialist

LE BERRE Cedric 150x150.jpg

Cédric Le Berre
Investment Specialist

WATCH OUT FOR THE REPLAY

REPLAY - Web conference on small and mid caps

With Charles Anniss, Cédric Le Berre and Benjamin Soussan.

Watch the replay
Small and mid caps

A fertile hunting ground for active managers

Learn more about our expertise on small and mid caps

Watch the video

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Further reading

UBP in the press 15.02.2018

Convertible bonds: it’s time to be tactical

As we enter 2018 after a record year, one question is on everyone’s lips: what can be reasonably expected from here?

UBP in the press 07.02.2018

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Smaller companies have now performed strongly over a number of years following the financial crisis and have a history of strong relative returns over the long term. What are the main contributing factors to these positive returns, and will the outperformance that has been seen in 2017 be followed by further strength in 2018?

UBP in the press 06.02.2018

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Contrary to some small- & mid-cap (SMID) segments of stock indices, the SPI Extra is not necessarily more of a reflection of the domestic economy than the wider Swiss equity market, where more than 90% of company revenues are generated abroad. Swiss SMIDs are broadly as international.