Small and mid-sized UK companies saw a second year of remarkable returns in 2013, according to The Numis Smaller Companies Index (“NSCI”) Annual Review 2014 published today.
The authors Emeritus Professors of Finance Elroy Dimson and Paul Marsh report:
During 2013, the NSCI, ex-investment companies (XIC) had a total return of 36.9% compared to 20.8% for the FTSE All Share.
Since 1955, the index has achieved a compound return of 15.8%, as compared to 12.0% on the FTSE All-Share.
Launched in 1987 at a level of 1000, the NSCI XIC returns index reached an all-time high on 31 December 2013 of 15,818. The Professors estimate a 50% probability of hitting 25,000 by late 2018.
In 2013, in 26 out of 31 global markets, smaller companies achieved a positive return. Over 2000–13, smaller companies outperformed larger ones in 28 of the 31 markets, by an average 5.2% / year.
Dimson and Marsh said: “Last year’s small-cap performance was outstanding, and we entered 2014 with new all-time highs for the Numis indices. Among constituents of the NSCI, micro-cap stocks, value investments and momentum trades performed particularly strongly.”