376. Is this the start of a new small-cap cycle?

Small-caps have historically outperformed over the long term, but recent years have been dominated by large-cap momentum and narrow market leadership. Nish Patel, manager of the Global Smaller Companies Trust, discusses why the backdrop may now be shifting. We cover how smaller companies can deliver faster earnings growth, the importance of focusing on quality to reduce fragility and why valuations are at levels that have historically signalled new cycles in small-cap performance. Nish also breaks down the Trust’s three key investment categories, highlights opportunities in industrials and long-cycle commodities, and explains why Japan is currently the most exciting hunting ground for new ideas.What’s covered in this episode: Faster growth potential in global small-capsWhy quality filters help reduce fragilityValuations at cycle turning levelsInterest rate cuts as a tailwindEconomic broadening beyond techIndustrial sector opportunitiesThree investment categories: compounders, quality cyclicals, long-cycle assetsJapan’s corporate reform boomWhy US valuations limit ideasRising M&A interest in high quality small-capsMore about this fund: The Global Smaller Companies Trust invests in smaller companies from around the world. Manager Nish Patel believes that these businesses experience superior growth over the long term compared with larger companies. His goal is to go where other equity researchers won’t, in order to find hidden gems at attractive prices. Learn more on fundcalibre.comPlease remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.