During Pedro Sánchez’s mandate, public expenditure has been financed with tax increases. According to some calculations, the tax agency could collect some 273,000 million euros in 2023, the best ever harvest, even more than 255,500 million euros in 2022.
According to the last monthly report on tax collection till March 2023, tax revenue in March reached 13,102 million, which means a year-on-year increase of 5.8%. Gross revenue experienced a similar growth of 5.5%, with the more dynamic behavior of direct taxes (9.5%), while indirect taxes and rates and other revenue grew more slowly (2.7% and -11.8%, respectively). In the first quarter of 2023, total revenue increased by 2.6% compared to the same period in 2022, reaching an estimated level of 56,150 million. The 6.1% increase in gross revenue was partially offset by a higher increase in returns made in the period (23%). Same-to-same revenue grew 4% in the quarter (4.4% through February).
The most important contributor to growth in the first quarter was matched by job retention. Gross VAT collections, however, continue to slow as a result of rate cuts and reduction in spending, which has also led to a decline in revenue from excise duties.
While households, self-employed/SMEs continue to struggle to meet their needs, the government continues to line its pockets. They can reduce VAT to reduce the tax burden for some:
Small cap or low capitalization companies are those whose market capitalization is in the range of 300 or 2,000 million dollars for those listed in the United States, while in Europe this limit will increase to 3,000 million euros. Above this limit will be mid-cap companies.
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These companies are a cornerstone of the stock market, representing about 60% in the US and a little over 50% in Europe, and with very significant weighting in economies for their contribution to job creation and growth. They are companies with more flexibility in their management and their decision making, with a more local focus.
Stock indexes referencing these companies are IBEX Small Cap, Stoxx Europe 200 Small, Russell or MSCI Small Cap. As can be seen, Spanish small caps have been the laggards, down 10.71% in the last year, while their European counterparts have fallen almost 50% less.
Even if we compare the behavior of IBEX Small Cap against IBEX 35, we see that in one year IBEX has gained almost 8%, Small Cap Index reports a negative return of 10.78%, Which is very bloody. With a PER of 9.8x while the IBEX 35’s is 10.18x.
As for sectors, while the financial sector has a weighting of close to 30% in the IBEX 35, it has no weighting in small caps, although it is the basic materials, industries and construction sectors that have the highest weightings, followed by services. and consumer goods:
IBEX Small Caps was launched in 2005 and is made up of 30 scrips and the most prominent are:
- Take. found again (8.04% weighting), with a capitalization of EUR 704.21 million, with a negative behavior over 12 months of -10%
- ninor (7.28%), with a capitalization of 717.5 million euros and a negative return of 18.6% in one year
- prose cash (7.02%) and with a decline of 8.6% in the last 12 months
- Michael and CostasWhich is the lowest decline in 12 months (-1.96%) and one of the weighting in the index of 6.24%.
- Day (5.91%) and that it is in positive territory over 12 months of +38%
Which funds should be taken into account?
The investor can opt for Iberia Fund, without the meaning of small cap, or funds that are implied in the name. Of the latter we have seen the following as the most prominent:
Where it can be seen that despite being managed by sector expert Lola Solana, the Santander Fund is not only lagging behind its peers but the index has also fallen by more than 7%.
In contrast, the CaixaBank Fund, Small & Mid Cap Spain manages to avoid negative 12-month returns, growing closer to 1% over the period. If we look at the accumulated returns over the year among these three funds, the one that does best is CaixaBank Small & Mid Cap with a return of 7.2% in 2023, almost 1 point from the Santander fund and almost two from the mutual fund. Of. While the latter’s portfolio showed 5% liquidity, Santander’s portfolio showed exposure of over 100% through the use of derivatives, and Caixa’s portfolio showed 4.7% liquidity.
The Caixa Fund also shows a very significant commitment to the cyclical consumer sector with an exposure of close to 24%, while the other two funds are under 10%. On the other hand, while its rivals have a higher exposure to the industrial sector (over 33%), Caixa has around 25%.
