How to find tomorrow's mid- and large-caps today

Professors Dimson and Marsh, of the London Business School, published their annual review of smaller companies investing in January. The review, now updated to end-2013, showed, once again, the presence of a ‘smaller companies effect’, whereby small-caps outperform their larger peers over time. Over its full history (since 1955), the Numis Smaller Companies index (NSCI) has beaten the annualised return on the FTSE All Share by 3.5% per year. Moreover, the volatility of annual returns on the small-cap indices is now only a little higher than the All Share. In 2013, the NSCI gave a return ...