Small Caps Are Set for a Revival
The Opportunity in Canadian Small Cap Growth
Summary
A portfolio of Canadian small cap growth stocks can be both additive to returns and complementary to an investor’s existing core equity holdings. It is an opportunity to find diversification to domestic large cap holdings, without incurring either the currency risk of international securities, or the liquidity risk that comes from private market investments.
The small cap segment of the stock market is typically underfollowed by other investors and, thus, provides more potential for a high-quality manager to outperform. In Canada, this universe also provides access to growth industries that are in more limited supply in the larger cap space.
Companies in these industries have been issuing capital at the highest rate in many years, adding to the breadth and depth of the market. Moreover, the relentless selling pressure on Canadian stocks from pension funds reducing domestic holdings is likely to subside or reverse as plans reach their target level of diversification.
For these reasons, Pembroke believes that Canadian small caps are set for a revival.
Pembroke invests in public companies with attractive long-term growth opportunities, who can finance their own growth, and which are overseen by management teams whose interests are aligned with shareholders.
Pembroke’s Canadian Growth Strategy has outperformed both the S&P TSX Composite and Small Cap indices over 5, 10, and 20 years.
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Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Commissions, management fees and expenses all may be associated with mutual fund investments.
Growing Wealth for Clients Since 1968
Since its founding in Montreal in 1968, Pembroke Management has focused on investing in high-quality growth companies in Canada and the US. With offices in Montreal and Toronto, Pembroke Management serves institutional and high net worth clients in North America and Europe.
Pembroke Private Wealth Management, a wholly owned subsidiary of Pembroke Management founded in 1988, offers a range of investment solutions to family offices and high net worth clients across Canada and is registered with the Mutual Fund Dealers Association.
The Pembroke group of companies is proudly independent and has combined innovation, insight and growth to help build client wealth. Visit our websit to learn more.