Global small caps trade at roughly 8% discount to large caps, Momentum says
IWM•Momentum Global Investment Management said global small caps traded at an approximately 8% discount to large caps. It cited record small- and mid-cap operating margins, estimated double-digit sales growth and lower technology exposure than large caps.
1. Small-cap valuation and risks
Momentum Global Investment Management’s October 26 analysis found global small caps trading at an approximately 8% discount to large caps. Small- and mid-cap operating margins reached record levels, while sales growth was estimated in double digits. The typical interest-cover ratio rose during 2026, indicating improved debt-servicing capacity despite higher borrowing costs. Smaller companies had 14% technology exposure, compared with 32% for large caps, but higher borrowing costs remained a risk and record margins could prove difficult to sustain.
