Mid & Small Cap Stocks Deliver Better Returns Over the Long Term

Source: BURSA ACADEMY | Published: June 2020

Gone are the days when investors sought only blue chip stocks as part of their trading strategy. Blue chip stocks are more stable in terms of share prices and have access to more capital to weather recessions. However, the price variation prospects are limited as most of these companies have reached maturity in their business life cycles.

While prudent investors might prefer to invest in blue chip stocks, investors who expect higher returns over a longer period will perceive such stocks as unexciting, generating less returns on investment. Mid and small cap stocks on the other hand are gaining momentum, evidenced by the emergence and growth of mid and small cap stock exchanges both internationally and in Malaysia. The largest of these is the Alternative Investment Market (AIM) in London.

In Malaysia, mid cap stocks constitute the FTSE Bursa Malaysia EMAS Index with full market capitalisation from RM200m to less than RM2bn, and small cap stocks a

Tags: FTSE, MID AND SMALL BUSINESSES, MIDS CAP INDEX, PORTFOLIO MANAGEMENT, SMALL CAP INDEX

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