With increasing globalization many companies, both large and small, are expanding their global footprint in the quest for growth. The global profile of large multinational companies is well documented in investment research1. While small cap firms have traditionally been viewed as being domestically oriented, we are also witnessing the emergence of many small cap companies that are venturing outside their domestic markets. At the same time, the global universe of small cap companies has grown...

As companies increasingly operate across multiple countries and regions, we consider the concept of "economic exposure" which may be derived from the geographic distribution of a company's revenues. This concept offers a new dimension to the construction and evaluation of global equity portfolios and may serve multiple purposes in the investment process - including macro view implementation, security selection, portfolio analysis, risk management and client reporting. Furthermore, a...

Many investors recognize that their reference universe should encompass large, mid and small caps, and furthermore accept the investment belief that smaller companies should earn a risk premium over larger ones. Nevertheless, in practice, most of these investors underweight the small cap segment. Institutional investors - particularly in Europe and Asia - tend to have limited small cap representation, even within their own markets.We review various aspects of this puzzle and argue that...