US Smaller companies opportunities and 2 fund ideas

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Small Cap US companies have been left behind by their larger cap peers. We look at what opportunities there might be and 2 fund ideas.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 23 January 2024

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Investors shouldn’t necessarily ignore the US. Its stock market accounts for around 62% of the global market, dwarfing all of its nearest competitors. Over the last five years however, US small cap stocks have been left behind by their large-cap peers.

This article isn’t personal advice. If you're not sure if an investment is right for you, ask for financial advice. All investments fall as well as rise in value, so you could get back less than you invest. Past performance isn’t a guide to the future.

Scroll across to see the full chart.

Past performance isn't a guide to the future. Source: Lipper IM, to 31/12/2023

US Smaller companies are trading at a significant discount to their large-cap peers. With higher inflation and interest rates hikes causing economic uncertainty, investors have preferred to invest in mega-cap