2020 Forecast for Small Cap Stocks

U.S. small cap stocks posted solid performance in 2019, but lagged behind the S&P 500 Index return of 31.49%. Small cap stocks have now underperformed large cap stocks the previous three calendar years and five out of the last six years.

Our Buffalo Small Cap portfolio management team has published a 2020 forecast for small cap stocks. Considering small caps have historically outperformed large caps, though with greater volatility, to underperform over several years is unusual.

However, since August 2019, the month after the U.S. Federal Reserve (the Fed) began lowering interest rates, small caps have outperformed their larger brethren.

In this latest white paper from the Buffalo Funds, we discuss the following concepts:
  • Earnings growth and relative valuation
  • Value vs. Growth
  • Financials & Energy
  • Technology & Health Care
  • Initial Public Offerings
  • Merger & Acquisition Outlook
  • Impact on the Buffalo Small Cap Fund

“We believe 2020 could be a solid year for small caps, and one where they could revert back to their long term outperformance relative to large cap.”

Download our latest paper to discover why we believe the market backdrop is still moving in a direction that favors premier companies with the potential to benefit from long-term trends trading at attractive valuations.

Opinions expressed are those of the author or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.