WEALTHTRACK Why International Small & Midcap Stocks Deserve Investor Attention
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Sep 26, 2025 David Nadel, lead portfolio manager of the Invesco International Small Mid Company Fund, dives into the overlooked realm of international small- and mid-cap stocks. He reveals how these stocks offer superior profitability and stability compared to U.S. counterparts. Nadel explains why foreign SMIDs are of higher quality and discusses factors like home bias for U.S. investors. He shares examples of global leaders like Carl Zeiss Meditech and highlights sectors like healthcare and IT consulting, emphasizing the benefits of compounding and dividends as strategic investment tools.
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Why U.S. Investors Avoid International SMIDs
- U.S. investors underweight international SMIDs due to home bias, familiarity with U.S. mega-caps, and perceived growth differences.
- Despite fears, statistics suggest adding international SMIDs can be constructive for portfolios.
Valuation Gaps Could Trigger Reversion
- Valuation imbalances and index concentration (U.S. dominance) can prompt reallocation into international assets.
- Investors may prefer higher yields and lower P/E multiples available outside the U.S.
Real Global Leaders In The Portfolio
- Carl Zeiss Meditech is the fund's top holding and a global leader in ophthalmic surgery equipment.
- Chemometec and Cochlear are other examples of undisputed global number ones in the portfolio.