Small Cap Stocks to Lead the Recovery: Strategist

There will be reasonable economic recovery next year — and small caps will be the leaders, said Chuck Royce, portfolio manager at Royce Funds.

“We had green shoots in the small cap world starting from early March,” Royce told CNBC at a Morningstar Investment Conference in Chicago.

“We had a powerful rally and that’s likely to continue in the small cap world.”

Royce said small caps have historically been the sector to lead markets into a recovery, because they have more flexibility and they are able to respond faster.

Investor Spring Cleaning - A CNBC Special Report
Investor Spring Cleaning - A CNBC Special Report

“They’re not tied to the auto industry, large banks and they don’t need as much financing,” he said.

(Watch the video to hear more of Royce's investment philosophy.)


No immediate information was available for Royce of his firm.


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