article 01-06-2015

Jay Kaplan's 2015 Outlook for Small-Cap Stocks on

Portfolio Manager Jay Kaplan is paying close attention to economic growth and interest rates.


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On December 16, 2014, Portfolio Manager Jay Kaplan was one of three panelists on's "Outlook 2015" Masterclass.

"There are two issues to think about," said Jay. "One is interest rates, one is economic growth," he added.

Jay, joined by Senior Vice President and Head of Alpha Investment Research at Segal Rogerscasey Alan Kosan and Managing Director and Global Head of Investment Research at Prudential Real Estate Investors Peter Hayes, discussed:

  • the prospects for small-cap stocks;
  • the performance disparity between small-cap and large-cap;
  • how an increase in interest rates may affect his portfolios;
  • what he's been seeing in the retail space;
  • areas of the market he is emphasizing and avoiding;
  • and his outlook for active versus passive approaches in the small-cap universe.

"I focus company by company and stock by stock," said Jay. "Every day I'm taking money off the table or I chuck things that become overvalued—I'm trying to recycle that cash back into undervalued situations where I can try and do maybe a little arbitrage."

Jay Kaplan has 26 years of investment experience. He is the portfolio manager of Royce Dividend Value Fund and Royce Total Return Fund (with Chuck Royce), Royce Value Fund, and Royce Capital Fund – Small-Cap Portfolio. He also serves as the assistant portfolio manager—along with Lauren Romeo—of Royce Pennsylvania Mutual Fund, Royce's flagship.

Important Disclosure Information

The thoughts and opinions expressed in this piece are solely those of the person speaking and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. Investments in securities of small-cap companies may involve considerably more risk than investments in securities of larger-cap companies. (Please see "Primary Risks for Fund Investors" in the prospectus.) 



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