Sentences with phrase «small cap premium»

This is mostly because there is no real small cap premium.

Further empirical evidence suggests small cap premium is concentrated in few sectors / industries which emerge out of nowhere and become sunrise industries.

Further small cap premium would be expected to be significantly positive in bull markets and significantly negative in bear markets, in other words small cap effect is a function of investor sentiment (risk - on vs. risk off sentiment).

This same small cap premium is present in foreign stocks as well, so if you are looking to tilt your portfolio toward smaller companies, consider some small cap international stocks as well.

One of the oldest and most common solutions is to include more of the small cap premium by equally weighting each stock in the index, and as shown in this post, equally weighted indices work well historically on average.

Academics have explored this «small cap premium» in great detail.

If one is a proponent of Fama - French and the belief that there is a systematic value premium and a small cap premium, the equal - weighted sector approach is a way to emphasize those factors.

Investing in private equity to benefit from the illiquidity premium and / or small cap premium is also a possibility as a means to diversify and benefit from the above stated premiums, even though this asset class has become very crowded as yields have declined significantly.

So splitting the sample period (1926 - 2014) into three periods of bull markets, bear markets and range bound markets would give us some more insights on the small cap premium.

Those who favor active investing have pointed to the small cap premium as a justification for their activity, and during the periods of history when small cap companies outperformed the market, it did make them look like heroes but it quickly gave rise to a counterforce, where performance measurement services (like Morningstar) started incorporating portfolio tilts, comparing small cap funds against small cap indices.

Perhaps we should ask Mr. Bogle if he believe in the Small Cap premium?

Over the 1 year period ending November 30, 2016, the small cap premium has actually turned positive (4.07 %) which is about in line with its 88 year historical average (4.26 %).

[i] If we were to look at the small cap premium over the last year, we can see exactly what Mr. Wellington is talking about in terms of magnitude.

Over the 1 year period ending October 31, 2016, the small cap premium was actually negative -LRB--0.15 %).

For decades, analysts and investor have bought into the idea of a small cap premium, i.e., that stocks with low market capitalizations can...

Research from Fama and French find that there has been a historical difference in performance from small companies compared to large ones, typically referred to as the «small cap premium».

Does the small cap premium still hold up if the great years in the 30s are excluded?

With many more investors understanding the small cap premium, it is likely the premium will be smaller.

For decades, analysts and investor have bought into the idea of a small cap premium, i.e., that stocks with low market capitalizations can...