Smithson Investment Trust launched in 2018 with a clear promise: give investors smart exposure to high-quality small and mid-cap stocks without the stress of stock picking. For years, that strategy worked. Smithson delivered a net asset value return of 76%, avoiding the flashier bets that backfired elsewhere in the small-cap space.

‍

But 2025 has introduced a tougher market. A shifting macro backdrop and changing investor sentiment have turned small-cap investing into an uphill battle. While Smithson was once viewed as a stable vehicle for long-term growth, questions are now mounting over whether the trust can keep delivering in today’s more uncertain environment.

‍

What Made Smithson Work

‍

From the start, Smithson set itself apart with a disciplined strategy. It focused on companies with strong fundamentals, consistent earnings, and competitive advantages. That meant avoiding speculative fads and emphasizing quality over hype. During the 2019–2021 bull run, this approach paid off, as many small-cap funds veered into riskier territory and got caught when sentiment turned.

‍

Smithson steered clear of:

‍

• SPAC overexposure,
• overleveraged tech plays,
• and meme stock noise.

‍

By doing so, it weathered periods that hurt other funds. But now, the same conservative approach is under pressure. Markets have shifted toward mega-cap dominance, and the appetite for steady small-cap stories has faded.

‍

The Market Shift

‍

Over the past 18 months, rising interest rates, slower economic growth, and persistent inflation have drawn capital away from the small-cap segment. Investors have moved into large, cash-rich companies like Microsoft and Nvidia, which have been buoyed by AI momentum and stronger balance sheets.

‍

As a result, Smithson’s recent performance has lagged. While it remains well above its initial NAV, it hasn’t kept pace with the broader market in 2024 or early 2025.

‍

Some investors still see Smithson’s recent weakness as a buying opportunity, not a warning sign. Historically, small caps have tended to rebound sharply after rate hike cycles end. If that holds true again, trusts like Smithson could benefit from the tailwinds once central banks shift toward easing.

‍

Still, it’s a more skeptical market today. Investors are demanding faster growth, clearer narratives, and stronger returns before they’ll commit capital to small-cap strategies. That puts pressure on Smithson’s managers to prove the portfolio can outperform, not just survive, in a macro landscape still dominated by big tech.

‍

‍

‍

Disclaimer

We are not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authorities. Further, our owners, employees, agents are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authorities.

‍

The sender of this email makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.

‍

The content on any of our websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors.

‍

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.

‍

Disclaimer: Past performance is no guarantee of future performance. This product is for educational purposes only. Practical application of the products herein are at your own risk and our partners, representatives and employees assume no responsibility or liability for any use or mis-use of the product. Please contact your financial advisor for specific financial advice tailored to your personal circumstances. Any trades shown are hypothetical example and do not represent actual trades. Actual results may differ. Nothing herein constitutes a recommendation respecting the particular security illustrated.

‍