Five reasons why contrarian small-caps are primed to generate big returns

Valued at bargain prices

An interesting market phenomenon is that small-caps tend to outperform large-caps over the long-term.

Smaller companies often have more focused business operations, higher returns on capital and are better able to participate in structural market changes. At present there are several compelling reasons why smaller companies are primed to shine. The Big Question: How to allocate for Q2? 1. Return of the size premium Smaller companies normally deliver better long-term returns than larger ones. The 'size premium' was identified in 1993 by Nobel prize-winning researchers Fama and French who found Small Minus Big (SMB) to be a key factor (alongside value) in explaining stock market outpe...