Vanessa van Vuuren
By Vanessa van Vuuren, portfolio manager at Sanlam Investments
The small-cap premium – fact or fiction? Since Eugene Fama and Kenneth French first published their US-focussed research around the so-called “size” or “small-cap premium” in 1992, debate has ebbed and flowed around whether this premium does in fact exist. In theory, the notion of a higher return to be extracted from smaller shares makes sense. These companies are growing and evolving faster than their established and mature counterparts, and they tend to have less liquidity, with limited published investment research available, potentially resulting in greater mis-pricings of what these companies are potentially worth. (more…)
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