The 'Small-Cap Effect' Isn't Dead, After All — Journal Report
Provided by Dow Jones By Mark Hulbert Contrary to reports in recent years that the small-cap effect has disappeared, it's actually alive and well. We've just been looking for it in all the wrong places. The small-cap effect refers to the long-term tendency of small-capitalization stocks to outperform the large-caps. Since the mid-1920s, according to data from Dartmouth finance professor Kenneth French, the 10% of stocks with the smallest market caps have beaten the largest 10% of stocks by an annualized margin of 2.4 percentage points. Much of the past two...