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By Gilles LEQUEUX and Bart GEUKENS, CEFA, Senior Portfolio Managers, Degroof Petercam Asset Management
Strategists tend to prefer certain regions, sectors or style factors, but they seldom agree about which market capitalisations one should invest in. Nevertheless, in the long run small caps clearly generate consistently higher returns.
The numbers speak for themselves: investors having exclusively invested in an index comprising the 50 largest companies in the world since 2000 would have missed out on a fair share of additional returns. Only during the crisis years of 2001, 2008 and 2011 would such a strategy have led to higher returns. According to calculations by Citigroup, such a large cap portfolio has risen by approximately 31% since early 2003,...
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