Small-cap stocks may be poised for a comeback this year, according to a strategist at Goldman Sachs Asset Management. James Ashley, head of international market strategy at GSAM, told CNBC’s “Squawk Box Europe” Monday that small caps offer “great opportunities” for those looking to capitalize in the current economic climate. It comes after a tough year for investors in smaller companies, with the S & P Small Cap 600 index falling by 16.6% in 2022. According to GSAM’s research, historically, small caps have delivered when inflation is high but falling, a phenomenon known as disinflation. For example, there have been 20 years since 1950 when inflation began the year above 3% and ended the year lower; in these years, small-caps had a median return of 21%. In comparison, large-cap stocks returned 5%, according to GSAM’s research. Small caps also outperformed when there were two consecutive quarters of GDP contraction, the research showed. While there are attractive options in other markets, Ashley said small caps were unique in the current environment with “some great opportunities there.” He added that exposure to small caps would offer access to secular growth usually not found elsewhere – especially given that valuations are currently near historic lows. Last week, Bank of America named its 2023 small-cap picks . They included e-commerce stock Xometry which the bank expects to roughly double in value within a year. ″[We] believe focusing on high quality small caps with resilient earnings is paramount this year. Many stocks on our list are well-positioned to weather an economic downturn, in our view,” wrote Jill Carey Hall, equity and quant strategist at Bank of America. Earnings concerns Despite the bullish outlook on small cap stocks, GSAM’s James Ashley expressed some concerns over companies’ earnings outlooks more broadly. Ashley said the low-growth environment is likely to cause margin compression in most sectors, with energy being the notable exception. He said while valuations appear to be reasonable given current economic conditions, the future of earnings seems uncertain. “If we are heading into a recession or something that might be close to a recession, then the outlook for earnings is going be quite challenged,” he added. — CNBC’s Michael Bloom and Sarah Min contributed reporting.