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Equity Diversification in Europe’s DC Market

We explain why global small-cap equities provide strong potential to enhance equity diversification and excess return in European DC markets, especially for active managers.

A field of bright wild flowers and green grasses.

3/1/2023

16 min read


Topic

Equities

Key takeaways

  • Although equities have the highest allocation in European DC portfolios, there is minimal diversification of equity choices, especially within small-cap equity.
  • We believe a market-cap-neutral allocation to global small-cap equities can enhance equity diversification in European DC markets.
  • This approach may offer the potential to capture the broad market opportunity over the long term.
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