Reeling In Small-Cap Alpha by Vitali Kalesnik and Noah Beck, Research Affiliates
Key Points

1. Stocks of small companies have higher incidences of price volatility and mispricing, increasing opportunities for investors to earn excess returns.
2. Implementing outperforming strategies, such as value or momentum, in the small-cap universe amplifies their alpha-generating potential.
3. High trading costs of small-cap stocks disadvantages passive implementation when compared to skilled active management.

Although we live . . .

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