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Aberdeen Small Cap Fund
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Contact UsThey say that good things come in small packages. This is especially true when it comes to investing as small companies have many features that can add up to big advantages for investors. In fact, when it comes to building—or rebuilding—assets, portfolios that do not include small companies may be missing out. Consider that:
- Small companies typically have room to grow — they are at the beginning of their lives and have the potential to deliver higher growth than their larger counterparts over the long term.
- Small companies can be innovative — they are creating the technologies, products and brands that will become the household names of tomorrow.
- Small companies tend to be nimble — they can ramp up or down quickly in order to profit from economic upturns and weather economic downturns, respectively.
- Small companies, in our opinion, are smarter than ever — many have emerged from the markets of 2008 with stronger balance sheets, higher profit margins and differentiated business models.
Adding shares of small-cap companies can provide diversification benefits to the equity component of a balanced portfolio. Historically over a long-term investment horizon, small-cap stocks have provided higher returns than those of larger company shares. Maintaining exposure to small-cap shares may provide investors with an opportunity to capture these gains.
It’s important to remember that smaller company stocks are usually less stable in price and less liquid than those of larger, more established companies, and as a result therefore may present greater risk to investors.
Small-cap companies generally garner less attention from the media and Wall Street, creating what we believe is a fertile ground for finding ”hidden gems.”