Global Small Cap Stocks: Reexamined and Redefined
78 Pages Posted: 20 Jun 2008
Date Written: July 1, 2007
The small-cap premium has not been apparent consistently in developed markets outside North America since 1989. Why? In this comprehensive study, the Brandes Institute investigates existing methodologies for defining the global small-cap universe and their relationship to performance. We also introduce regional and country universes designed to analyze constituent-level fundamentals and their influence on historical performance differences.
Our research reveals that North American small caps have shown differentiating fundamental traits vs. their non-North American small-cap peers. But these differences in fundamentals may not fully explain the performance disparity. Perhaps the origins of a company and its point on its lifecycle are different across regions. The Brandes Institute intends to examine the performance characteristics of lifecycle groupings among small caps across regions and sectors.
Keywords: small cap, stocks, investors, investment, foreign stock, international investing, global small cap, lifecycle
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