“Asset Light” small-caps have sharply outperformed since Jun ’22, when inflation peaked at 9.0%, with that outperformance accelerating sharply since the market’s post-Liberation Day low.
“Asset Light” small-caps struggled mightily during the last Inflation Boom. From Dec ’20 to Jun ’22 “Asset Light” companies floundered, underperforming “asset heavy” companies by over -2100 bps as inflation ramped and the Fed hiked rates sharply.