In depth 

Small caps win despite market’s population problem

Small caps win despite market’s population problem

Hobby investors love the high-octane world of small-cap shares because compensation for lower liquidity, higher spreads and oversight costs can come in the form of multi-bagger returns. Aggregating small-cap performance on the main UK market, the 2019 review of the Numis Small Companies Index (NSCI), shows this size premium is in rude health. The most widely used benchmark, NSCI XIC – which excludes investment trusts – made 25.2 per cent including dividends in the 2019 calendar year, versus 19.2 per cent for the large-cap oriented FTSE All-Share index.

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