Germany is facing continued headwinds, such as divided politics, reliance on China, and high energy costs, weakening its economic outlook. Nevertheless, Global Alpha recently pointed out that selected opportunities in Europe’s second-largest economy exist, especially in the German small cap space.

“Despite all the gloominess, we still see pockets of opportunity within German small caps, although we remain highly selective. The downward trajectory of rates, undemanding relative valuation to large caps and declining energy costs are all positives for small caps which represent 14% of its overall equity market,” the insight highlights.

Read the full insight here.