In this episode, we explore Montanaro European Smaller Companies Trust PLC (LSE:MTE) and its focused strategy on European small caps. The discussion centres on MTE's quality growth philosophy and its recent performance amidst challenging market conditions. The podcast highlights the small cap effect, where European small caps have historically outperformed larger companies, and MTE's disciplined approach in selecting fundamentally strong businesses. Despite facing headwinds such as underperformance of small caps and a market shift towards value investing, MTE identifies a significant valuation anomaly, suggesting a potential buying opportunity. Listeners are prompted to consider whether the current crisis-level PE discount in European small caps signifies a change in trend or presents a fleeting moment for investors.