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What to make of the revival of US small-caps

We aren’t convinced the outperformance of US small-cap (SC) equities since Donald Trump’s victory on 5th November sets the tone for the first half of 2025. We doubt they will start to fare better than large-cap (LC) equities over a sustained period until shortly before the bubble in AI bursts, which isn’t something we envisage happening next year.

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