What Canada Is Missing

One factor that could explain the historical lack of international participation in U.S. mid- and small-cap segments is that investors’ performance may not have been as good as that of S&P DJI’s benchmarks. Smaller stocks are more expensive to trade, and the in-category record of active managers has been relatively poor over the past decades. However, an alternative is now available. With index funds for U.S. mid- and small-cap segments developing track records across global markets, including in Canada, a broader range of market participants may feel comfortable accessing this previously overlooked source of returns.

Note: Thanks and credit for Exhibit 1 are due to Sherifa Issifu, co-author on the earlier European work.

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If you’d like to dig deeper into the topic, I’ll be presenting this research along with some related thoughts at an upcoming S&P DJI webinar for Canadian professional investors. ...

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