He added: “Most investors will also understand that putting less than 1% of a portfolio into a company is not really very productive: if that company turns out to be a real winner, it won’t create very much gain if the portfolio only has half of a per cent allocated to that company.”
In fact, out of the roughly 4,000 publicly-traded companies in the US listed on the major exchanges, more than 2,300 of them have market capitalizations below $1 billion, and over 2,700 have market capitalizations below $2 billion.
“To make matters worse for large funds, many of the biggest opportunities for growth will be found in companies with smaller market capitalizations,” Frigon said. “Investment options diminish as an investment strategy gets bigger, as does the speed with which the strategy can buy or sell an investment position.
“For some investment goals, investing in funds with fewer assets under management can offer greater opportunity.”
The second major opportunity Frigon highlighted for investors was Israel, pointing out that every major US technology company, and increasingly US-based bio-pharma companies, have research and development centres in the country.
