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25Q2 Market Commentary
It has certainly been a lively quarter. Events have been coming thick and fast starting with “liberation day” tariffs and ending with accelerating tensions in the Middle East. But, despite what feels like heightened uncertainty, global equity markets have continued to grind upwards resulting in all-time highs in many countries.
The Land of the Rising Returns
As Japan makes up 36% of the MSCI EAFE Small Cap Index ("the benchmark") international small cap investors need a clear perspective on the smaller listed companies in this market. The high weight reflects the very large number of listed Japanese companies in the developed small cap universe. By contrast, Germany, which has a broadly similar total gross domestic product ("GDP"), is less than 5% of the benchmark, as most companies prefer to remain private.
25Q1 Market Commentary
Our latest quarterly market commentary, providing insights and analysis on recent trends and developments in the international small and midcap markets.
Microcap Opportunities Whitepaper
The focus of this white paper is on the microcap subsector of international small cap; a vast pool of relatively illiquid, overlooked and often poorly researched stocks. Many are weaker companies, but a minority are truly mis-priced businesses and make great investments for the active stock picker.
Reflections on the Past 25 Years
True contrarian investing is to be buying in the apathy stage when nobody cares. That feeling you probably got when you saw the title of this letter – that is apathy, verging on torpor. I hope it will be worth reading nonetheless, and I encourage you to persevere. Perhaps set aside a few minutes from your busy day, sit somewhere comfortable away from your phone and reflect on how you might profit from it, or at the very least, avoid losing money.
Why Japan's Third Arrow has hit the Mark
At Highclere, we attempt to add value for clients in two ways: firstly, to manage their money as best we can as stock-pickers in our international small-mid cap universe and, secondly, to share insights which we hope can be beneficial in their broader investment programs. These are the benefits of forward-looking active management.
The Case for Japanese Small Cap Equity
This newsletter will concentrate on a topic of great current interest: Japan. Japan is a frequent subject of conversation in international small and midcap and when discussing the country with clients we like to make a number of points. Firstly, Japan is a very large universe with around 2,100 listed companies with market caps of more than $150 million. But more interesting is that 1,952 or 93% of these are sub-$10 billion with only 7% in the large cap space.