Rethinking Small Cap Investing: how earnings acceleration beat the market

Small caps outperform over the long run. This is a well-established fact, since they are faster growing companies. Small caps are also, however, a more volatile asset class than large caps, so market selloffs like the one seen in March 2020 can often unsettle investors. In these selloffs the best managers can deliver not only downside protection, but take advantage of opportunities to profit as the market recovers. An earnings acceleration approach offers a highly differentiated way to manage through volatile markets, helping reduce fundamental risk and deliver long-run outperformance. American Century Investments have been applying this differentiated approach to growth investing since 1971, and it has proven especially effective in the small cap market. Join Richard Adams, Senior Investment Director, as he explains how the approach has been applied in recent months and shares ACI’s best ideas across global small caps for the next 12 months.