The Often Overlooked SMID Asset Class

The Often Overlooked SMID Asset Class

SMID cap stocks have historically been underrepresented in traditional asset allocation models.  Cambiar examines three reasons why this area can potentially add value to an asset allocation model.

Cambiar Investors believes a more diversified domestic allocation must include exposure to the small-mid (SMID) asset class.  This area of the market can potentially provide:


  1. Higher Risk-Adjusted Returns – Similar to small-cap stocks, SMID stocks possess strong risk-reward characteristics.
  2. Lower Volatility – Medium-sized businesses typically offer a greater degree of stability than small-cap stocks.
  3. Larger Opportunity Set – The overall number of companies that fall within the market cap range, coupled with sparse analyst coverage, is an ideal backdrop for active management to take advantage of inefficiencies.

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Certain information contained in this communication constitutes “forward-looking statements”. Due to market risk and uncertainties, actual events, results or performance may differ materially from that reflected or contemplated in such forward-looking statements. Securities highlighted or discussed in this letter have been selected to illustrate Cambiar’s investment approach and/or market outlook and are not intended to represent the performance or be an indicator for how Cambiar’s portfolios have performed or may perform in the future. The portfolios are actively managed and securities discussed in this letter may or may not be held in client portfolios at any given time. Nothing in this letter shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument referenced. The specific securities identified and described do not represent all of the securities purchased, sold, or recommended by Cambiar and the reader should not assume that investments in the securities identified and discussed were or will be profitable. Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts may be based upon third-party sources that are deemed to be reliable, however, Cambiar does not guarantee its accuracy or completeness. Past performance is no indication of future results. All material is provided for informational purposes only and there is no guarantee that the opinions expressed herein will be valid beyond the date of this communication.