BSE small-cap gives 72% return, Sensex 34% in 3 years
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Mumbai: With 72% return to investors, S&P BSE SmallCap index has outperformed the Sensex and large-cap indices in the three-year period ended 31 May.
While the small-cap index of the BSE has given a return of 72.11%, S&P BSE SmallCap Select index, which is a measure of the performance of the 60 most liquid small-cap companies, has generated a return of 66.86%, as per data compiled by S&P Dow Jones Indices for a period of three years ended 31 May 2017.
On the other hand, blue-chip index Sensex and S&P BSE LargeCap companies have shelled out a return of 34.24% and 38.56%, respectively, in the period under review. “We see that in the three-year period ending 31 May 2017, the absolute returns of the S&P BSE SmallCap and S&P BSE SmallCapSelect were significantly higher than those of the S&P BSE LargeCap and S&P BSE Sensex,” S&P BSE Indices associate director (product management) Ved Malla told PTI.
“This significant outperformance by small-cap stocks has resulted in more market participants looking at the small-cap segment,” he added. Small-cap indices have also outperformed the large cap companies over one year period ended 31 May, delivering a return of 36.22 %. S&P BSE SmallCap Select generated a return of 30.89% for its investors.
Comparatively, large-cap has given a return of 20.78%, while Sensex companies shelled out 18.22% return for the one-year period. Similarly, investors received a return of 36.10% and 26.03% from S&P BSE SmallCap and Smallcap Select indices, respectively, over two-year period ended 31 May 2017.
This is much higher returns from BSE LargeCap (17.51%) and benchmark BSE Sensex (15.14%). In terms of market capitalisation, small-cap index on BSE has scaled up by 36%, while the value of large-cap companies increased by 24 % — much lower than small cap indices, in the one-year period ended 31 May 2017.
According to Malla, there has been a paradigm shift in investment patterns as market participants are now going beyond traditional large-cap companies and venturing into companies in the mid-cap and small-cap segments. S&P Dow Jones Indices is a global leader in providing investable and benchmark indices to the financial markets.