I recently came across this Hoare Govett Smaller Companies index for the first time while researching smallcap investing. It covers the bottom 10 per cent by value of the UK stock market. There's a video about it here.
The index has now been extended back to 1955 and also boasts various derivations - such as the HG1000, the smallest 1,000 stocks, and the HSGC plus Aim (Alternative Investment Market).
I thought that this comment was particularly interesting:
An investment 55 years ago of GBP 1000 in the HGSC, with dividends reinvested, would today be worth GBP 2.6 million, as compared to GBP 0.5 million if the investment had been in the FTSE All-Share.”
It made me wonder how either passively index-tracking this index or investing in managers that are tracking that index would compare with the kind of activist individual smallcap stock picking that it is prevalent amongst investors on this site, i.e. how much of the outperformance users here seem to be enjoying is down to stock selection, versus the fact that smallcaps themselves tend to outperform ("the law of large numbers" etc).
Anyway, I am going to use this thread as a home for interesting smallcap sector research I find and the names of any smallcap fund managers I come across...
Interesting Links:
