For much of the past five years, EU small caps have lived in the market’s coldest corner. 2025 effectively marked a fifth consecutive year in which smaller European companies lagged their large-cap peers, an anomaly that defies decades of market patterns.

Emerging Market (EM) equities tend to move in ‘super cycles’, extended periods of outperformance or underperformance relative to Developed Markets (DM). The last EM upcycle began in the late 1990s, following the Asian debt crisis, and lasted until the early 2010s. This was succeeded by nearly 15 years of EM underperformance. However, with EM equities now outperforming DM for the second consecutive year, investors are increasingly questioning whether we are entering a new super cycle. We examine the underlying drivers and find compelling reasons to believe so.

In 1993, NVIDIA had roughly 90 days of cash left after its first chip flopped. Jensen Huang and co-founders Chris Malachowsky and Curtis Priem scrapped the original architecture and pivoted towards building a graphics chip designed specifically for PC gaming. That near-death decision eventually turned the struggling company into one of the greatest wealth creators in public market history.