Opinion
Why the ‘size effect’ doesn’t work for Aussie small caps
Australian investors love small companies, but why do these lag their global counterparts when it comes to sharemarket performance?
Arian NeironContributorAustralian investors love small companies.
We are told these have greater scope for growth, and the academic world has found this to be true. In 1981, Rolf Banz wrote his dissertation on the pricing of small companies in the US market and found that smaller firms had higher risk-adjusted returns, on average, than larger companies.
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