With Clarity Comes Opportunity: SMID Caps in Focus

The volatility we’ve experienced in 2025 serves as a reminder of how valuable diversification can be in a portfolio. Smaller U.S. companies, despite generally having less direct exposure to international trading networks, have been the victims of de-risking across portfolios. Following periods of elevated volatility, SMID caps have historically benefited from strong recovery.

Though larger companies still account for a greater portion of investor portfolios, this may be a good time to consider smaller cap companies. This less covered, less efficient area of the market can be difficult to navigate, but we'll discuss how Morningstar's proven equity research can help you invest in SMID caps from a position of strength. We’ll highlight: