During the Morningstar Investment Conference, three managers of stock funds specializing in small-company stocks emphasized the continued importance of small caps in the investing world. Despite the current dominance of large-company stocks like Apple and Tesla, the panelists highlighted opportunities in sectors such as industrials and consumer discretionary, as well as in markets like Japan and the United Kingdom.
While large caps have been outperforming small caps, the panelists shared strategies for finding value in the small-cap space. Morgen Peck from Fidelity Investments emphasized the importance of focusing on companies with unique niches and attractive valuations in international markets. Don San Jose of JP Morgan Asset Management also favored industrials and cyclicals, while Keith Lee of Brown Capital Management preferred growth-oriented companies with less than $500 million in annual operating revenue.
In the age of artificial intelligence and machine learning, the managers discussed how firms can use AI to improve their businesses rather than solely investing in AI-related stocks. They also noted that they have not been swayed by the meme stock craze that focused on many small-cap companies.
Despite challenges such as companies staying private longer and higher interest rates that can impact small-cap firms, the managers remain optimistic about the opportunities in small-cap investing. DailyBubble believes that staying consistent in investment strategies and focusing on long-term performance are key to success in navigating the small-cap market.