'We continue to like Asian small-capitalization stocks
as they are particularly exposed to the solid growth potential we expect from this region over the long term.
The USD69 billion Vanguard Emerging Markets Stock Index Fund, USD52 billion Vanguard Developed Markets Index Fund, USD20 billion Vanguard European Stock Index Fund, and USD6 billion Vanguard Pacific Stock Index Fund will move from FTSE benchmarks containing large- and mid-capitalization stocks to broader FTSE benchmarks that include large-, mid-, and small-capitalization stocks
, as shown in the accompanying table.
Northern Trust Asset Management launched a fund for institutional investors that encompasses quality small-capitalization stocks
across global developed equity markets.
Standard & Poor's Composite 1500 index, a measure of large-, mid- and small-capitalization stocks
, showed a price gain of 13.7% for 2012.
Historically, what you found is that you've been able to get a premium from an investment standpoint if you had exposure to small-capitalization stocks
and value stocks.
climbed as better-than-expected new-home sales and encouraging second-quarter earnings emboldened investors to pile into riskier assets.
Tsuyoshi Segawa, head of equity dealing at New Japan Securities Co., said institutional investors are showing a strong appetite for small-capitalization stocks
"The best buying opportunity may come after the beginning of the year," he says, "if Y2K fears temporarily depress the market." His favorite market sectors are those that have lagged: small-capitalization stocks
, foreign stocks and real estate investment trusts (REITs).
Research in financial economics suggests that market-wide information may impact the prices of large-capitalization stocks more quickly than small-capitalization stocks
. In his seminal paper, Fisher (1966) points out that nonsynchronous trading can induce positive autocorrelation in individual stock returns.
I have since devoted my career to the unjustly maligned and investment-rich universe of small-capitalization stocks
Global index provider MSCI classifies all of the private television companies in China and Hong Kong as small-capitalization stocks
. MSCI also calculated the percentage of the Chinese and Hong Kong stock markets the TV industry represents.
As the stock market continues its meteoric rise, small-capitalization stocks
have been like bell-bottom jeans and the pet rock: out of style.