Is the significance of size diminished?

Quick Summary:

The Russell 2000 small-caps index has now lagged behind the S&P 500 large-capitalisation index since its inception at the end of 1978, overturning a century of return data across multiple countries.

But now the relative quality of smaller US companies has for some reason atrophied, and stock market returns simply reflect that fact?

In the 1990s, small caps routinely delivered returns on invested capital in the teens and even as interest rates declined to 1% in the early 2000s, small company investors could expect low double digit returns from the index.

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Article Details

Author / Journalist: Robin Wigglesworth

Category: MarketsFinanceInvesting

Markets: United StatesJapan

Topics: 2000 Small-cap Stocks Caps Russell Index Companies Market Quality Small Smaller

Source Website Secure: Yes (HTTPS)

News Sentiment: Neutral

Fact Checked: Legitimate

Article Type: News Report

Published On: 2024-04-17 @ 11:19:27 (1 weeks ago)

News Timezone: GMT -5:00

News Source URL: ft.com

Language: English

Article Length: 3305 words

Reading Time: 19 minutes read

Sentences: 162 lines

Sentence Length: 21 words per sentence (average)

Platforms: Desktop Web, Mobile Web, iOS App, Android App

Copyright Owner: © Financial Times

News ID: 20712888

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About Financial Times

Main Topics: MarketsFinanceInvesting

Official Website: ft.com

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Year Established: 1888

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Publisher ID: #3

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