Europe Market Report - The Mid-Cap Effect - December 2013
Dec 11, 2013
Since the outbreak of the global financial crisis in 2008, global mid-cap stocks have been unique, providing a better risk-adjusted return than a combination of large and small-cap stocks. Recent global trends, such as low interest rates, decreasing risk aversion and the availability of cash for acquisitions, may have favored the outperformance of mid-cap stocks. In this Europe Market Report, we look at this trend through the lens of the Barra Europe Equity Model (EUE4) and show how the ‘Mid-Cap Effect’ in Europe is captured by utilizing the Non-Linear Size factor.