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Tristan Camp

Global Portfolio Specialist
Franklin Templeton


Tristan Camp joined the firm in 2021. He previously worked for Franklin Templeton (Royce’s parent company) and its predecessor organization, Legg Mason, since 2007. Before that, he worked for a subsidiary of BNP Paribas in France. Mr. Camp holds a bachelor’s degree in law from the University of Panthéon-Assas, Paris. He also has a master’s in financial management from ESG Management School, Paris.


The under-appreciated asset class: how to take advantage of the opportunity set in U.S. small cap stocks

14h00 - 14h30
Conference Room 4

U.S. Small Caps could be viewed as a “forgotten asset class”: For instance, the Russell 2000 index of smaller companies only makes up 6.1% of the All Cap Russell 3000 index currently, near its closest ebb in 20 years. Investors have instead focused their attention on other segments of the market such as large cap growth stocks. Yet, this runs counter to longer term return trends and could set small caps up for a sustained period of stronger performance, particularly as they appear historically cheap, in both absolute terms and relative to large caps.
They are also well positioned if markets have entered a phase of higher rates and higher inflation given their solid record in such environments.
In addition, trailing 5-year returns for U.S. smaller companies have been weak in comparison to long-term averages and in this configuration, the subsequent average annualized 5-year performance for the Russell 2000 small cap index has been positive 100% of the time and higher than the average 5-year return (13.8% vs. 10.5%).
Royce Investment Partners is a specialist investment manager subsidiary of Franklin Templeton and has been part of this organization since 2001 but its existence dates back to 1972 when it was founded by Chuck Royce, even before the main small cap indices were launched. It is a dedicated small cap specialist as opposed to a small component of a larger business and the totality of its 39 investment professionals are focused on this space. This has enabled the company to build a unique domain knowledge of the asset class, which would be nearly impossible to replicate today. It also allows for a broad dissemination and sharing of ideas across the firm.
We offer both U.S. and global portfolios investing in smaller companies. Two U.S. small cap UCITS funds are available, representing highly active, very complementary approaches in this space.
• Royce US Small Cap Opportunity fund

o The process starts with looking for cheap stocks that are experiencing a rough patch to due to challenges specific to the company or because of industry-wide issues.
o It is a value strategy investing in a very diversified portfolio of small and micro caps, differentiating it firmly from most of the competition, which gravitates towards quality and growth.
o It is a volatile fund that tends to amplify market moves up and down, with upside/downside capture ratios of 1.29 and 1.08 respectively over the past 3 years. It has a great track record of capturing the upside coming off significant drawdowns, e.g. most recently in 2020.

• Royce US Smaller Companies fund

o The starting point is a quality starting point. The fund looks for companies with solid balance sheets, superior profitability and the ability to generate high levels of Free-Cash-Flow, which it seeks to purchase at attractive valuations. As Lauren Romeo, the portfolio manager, puts it, it invests at the “intersection of quality and value”.
o This makes it a core portfolio which could be a better option for investors which struggle to get over the level of diversification in US Small Cap Opportunity or prefer a more balanced option. Upside/downside capture is 1.04 and 0.99 over the trailing-3 years.

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