European small caps deserve more respect

small-cap investments

European small caps are worth considering because they offer diversification regardless of the market cycle and, with thorough research, it is possible to find small caps that outperform

European small capitalisation shares as an asset class do not get much respect. Sell-side analysts tend to ignore them because of low volumes and slim commissions. Fund managers are often wary of getting involved with shares that are illiquid and volatile. The business niches they focus on can be obscure and difficult to understand, while name recognition of both companies and managements can be low. This state of affairs, however, means those investors who are able and willing to immerse themselves in the European small companies universe are likely to be suitably rewarded for their extra...