The Small-Cap Effect Strategy – Performance, Investing, Factor, Returns Analysis
Today we will introduce you to a well-known stock market anomaly – the small-cap effect strategy.
Small-cap stocks are one of the types/factors you can invest in and hold in your securities portfolio.
Small-cap stocks differ from large- and mid-cap stocks in several ways and have advantages and disadvantages.
If you want to invest in small-cap stocks, this article is for you. We explain the small-cap effect, what it is, and we backtest different classes of small-cap stocks and compare the results with mid- and large-cap stocks. We will see if small-cap stocks outperform mid- and large-cap stocks.