Five facts for European Small & Mid Caps

There are good reasons why European Small & Mid Caps belong in every equity portfolio – ideally actively managed. Five facts that every investor should know:

Fact 1: higher profit
European Small & Mid Caps can offer investors higher profits over the long term than Large Caps.1

Fact 2: lasting reasons
The particular profit drivers include the diversity of focussed business models (in part "being a world market leader in a niche"), the flexibility of smaller companies and a broader mix of industrial sectors.

Fact 3: lower volatility
Robust profit growth and concentration on successful core business: Both are among the reasons why a Small & Mid Caps portfolio has lower fluctuations than Large Caps over the long term.2

Fact 4: big growth potential
The hidden champions among the stocks have a big potential: Nearly all of the current big listed corporate groups started out as small companies.

Fact 5: active management for higher returns
Markets with information inefficiencies such as Small & Mid Caps have a high alpha potential. Ideal conditions for active asset management that can make use of information advantages for investment decisions.




1 Comparison over 17 years (01.01.2000 to 31.07.2017):

STOXX Europe 50 Return (9,97%) vs. STOXX Europe TMI Small Return (250,68 %). Sources: Bloomberg.

 2Comparison over 17 years (01.01.2000 to 31.07.2017):

STOXX Europe 50 Return (volatility p.a.: 20,73%) vs. STOXX Europe TMI Small Return (volatility p.a.: 17,00%) Sources: Bloomberg.


Pascale-Céline Cadix
Senior Relationship Manager

Oliver Böttger
Partner, Senior Relationship Manager