In a recent article published in Alan Kohler's Eureka Report, financial education consultant Scott Francis takes a look at the recent performance of the small cap segment of the Australian share market.
The recent returns have been strong with the ASX Small Ordinaries Index outperforming the ASX100 by 18% over the course of 2009 to the 4th of August. However, 2008 provided a stark reminder that investing in small companies is not a risk free proposition. The Small ordinaries Index underperformed the ASX100 by 16%.
Scott concludes that there is still general support for the idea that small companies have a higher expected return than large companies, and certainly the strong returns from small companies in the Australian stockmarket over this calendar year provide some support for this thinking.
To take a look at the full article please click on the following link - Can small caps stay ahead?