Structural inefficiencies in global small caps, driven by limited analyst coverage, liquidity constraints, and valuation dislocations, create hidden gaps and opportunities for alpha. However, identifying these opportunities is increasingly challenging amid geopolitical uncertainty, market volatility and the sheer size of the universe. Traditional investment models struggle to process the vast data needed to identify market mispricing, but AI and Big Data offer a game-changing edge to cut through the noise. By combining AI, alternative data sets, and human expertise, investors can identify new themes, access untapped markets, and capitalise on market dislocations. Against a macroeconomic backdrop of potential fiscal expansion, easing monetary policy, and a higher tariff environment favouring small caps, these market forces present a compelling opportunity for investors.

Dennis Walsh | 0.75 CE

With monetary policy easing set to provide an additional tailwind for smaller companies, now is the time for practitioners to consider increasing global small caps exposure in portfolios.

Dennis Walsh