OT GMO Quality Small-Cap Stocks

For most of the past decade, small cap stocks were expensive versus both their own
history and their typical multiples against large cap stocks. However, in more recent
years, there has been a significant derating of small cap stock valuations, which have
fallen 39% from their post-Global Financial Crisis peak versus the broader market.1
Today, we believe small cap stocks have become notably cheap. Within the U.S.,
small caps trade at a 21% discount versus their typical relative multiple against the
total market.