We analyzed the performance of small caps vs. large caps since the late 1980s to find out which has generated superior returns during tough economic times.

A number of recession indicators are either flashing red or on the cusp of doing so. And, as bottom-up stock-pickers, we don’t need to look far to find evidence that these are challenging times for companies.

Investors may ask themselves if now is the time to skew equity allocations to more liquid large caps. From an emotional perspective, this feels like a logical investment strategy. The data on investment returns, however, suggest quite the opposite.

Important Risks: Investing involves risk, including the possible loss of principal. • Small- and mid-cap securities can have greater risks and volatility than large-cap securities. • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets.

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The views expressed herein are those of Schroders Investment Management (Schroders), are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. The opinions stated in this document include some forecasted views. Schroders believes that they are basing their expectations and beliefs on reasonable assumptions within the bounds of what they currently know. The views and information discussed should not be construed as research, a recommendation, or investment advice, nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Schroders or Hartford Funds.