Small caps are currently experiencing one of their longest periods of underperformance since the 1980s.1 This has left small caps historically cheap just as we may be entering an environment that has benefited small-cap performance in the past. If and when this regime shift from large caps to small caps occurs, small-cap investors may be positioned to benefit, particularly if the inherent risks in small-cap investing are properly navigated.
1 Data Source: Compustat, calculations: Hartford Equity Modeling Platform, as of 6/30/23.
2 Data Source: Hartford Funds, as of 6/30/23.
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Important Risks: Investing involves risk, including the possible loss of principal. • Small-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. • Diversification does not ensure a profit or protect against a loss in a declining market.
The views expressed here are those of the authors and should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams, and different fund sub-advisers, may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of 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 Hartford Funds.
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