Global Small-Cap Stocks: Three Reasons for a Rotation in 2025
Following strong recent performance of large-capitalization stocks, we see three reasons small caps could be poised for a resurgence.
Key takeaways
- As interest rates have started to drop, net income growth rates have begun to accelerate for U.S. and non-U.S. small-cap stocks.
- Valuations of small caps have been depressed despite an earnings acceleration and appear to be at attractive entry points.
- Some geopolitical tensions may be easing, which could reduce uncertainty and lessen pressures on small caps.
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