Small caps have been outperforming the large caps steadily over the past few months. So will the trend continue? Michael Cuggino, president and portfolio manager at Permanent Portfolio Funds, and Eric Marshall, director of research at Hodges Capital Management, shared their insights.
“We think now is a good time for investors to be looking at small cap companies which typically outperform in the early stages of a new market cycle,” Marshall told CNBC.
“It’s also easier to find growth in small caps relative to large caps in a more moderate macro environment.”
Marshall said he also expects M&A activities to continue, which should benefit the small-cap companies.
In the meantime, Cuggino expects that economic growth will continue in the long-term, which should be advantageous for the large-cap firms.
“Bigger companies have greater resources, more diverse product lines, ability to tap markets further away from home than smaller companies do,” he said.
“And therefore, in this economy, larger caps should do well and grow in this environment as well as small cap stocks.”
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No immediate information was available for Cuggino or his firm.