Tag Archives: Australian small-cap equities
The Importance of Profitability in Australian Small Caps
It has long been evident that small-cap companies with a track record of generating earnings have outperformed relative to their peers. Profitability matters for small-cap companies, and the S&P/ASX Small Ordinaries Select Index was launched in 2018 to provide a measurement of these companies in Australia. The S&P/ASX Small Ordinaires Select Index—which includes a profitably…
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Dissecting Performance Characteristics of Growth Factors in Australian Small-Cap Equities
In our previous blog, we suggested growth factors with longer lookback periods may be more effective for constructing growth factor portfolios in Australian small-cap equities. In this blog, we examine the performance cyclicality, factor exposure, risk/return decomposition, and factor correlation for the long-term growth factor portfolios.1 From April 20, 2001, to June 30, 2020, the…