Time to Think Small: Francis Gannon on Nightly Business Report
article 01-19-2016

Time to Think Small: Francis Gannon on Nightly Business Report

Co-CIO Francis Gannon joins Nightly Business Report hosts Tyler Mathisen and Sue Herera to discuss small-cap performance, the market’s transition from growth to value, and the role of active management in 2016.  


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"The small-cap market is a market in transition today," Co-CIO Francis Gannon told Tyler Mathisen and Sue Herera on CNBC's Nightly Business Report.

Francis joined the program on January 12, 2016 to discuss small-cap sector performance in the bear market that kicked off 2016 as well as the transition from growth to value.

The small-cap market is down 20%, and Francis believes is a healthy correction.

When asked about the recent bear phase, he said, "I think one of the transitions … the small-cap market is in transition today is that you’re seeing the market rotate from growth to value. Value dramatically underperformed growth in the small-cap space over the past six years. In fact, growth outperformed value in five of the past six years within the small-cap space. That transition really started in the latter part of last year, and I think it is going to continue throughout this year."

Francis also touched on the importance of active management in 2016, saying, "The next five years are going to be dramatically different than the past five years." 

To conclude the segment, he explained why he believes value funds will start to outperform growth funds and discussed Royce's specialty, which is to try to find great businesses at great prices.

Francis Gannon has 22 years of investment industry experience. He joined Royce in 2006.

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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