While the small-cap index of the BSE has given a return of 72.11 per cent, S&P BSE SmallCap Select index, which is a measure of the performance of the 60 most liquid small-cap companies, has generated a return of 66.86 per cent, as per data compiled by S&P Dow Jones Indices for a period of three years ended May 31, 2017.
"We see that in the three-year period ending May 31, 2017, the absolute returns of the S&P BSE SmallCap and S&P BSE SmallCapSelect were significantly higher than those of the S&P BSE LargeCap and S&P BSE Sensex," S&P BSE Indices Associate Director (product management) Ved Malla told PTI.
"This significant outperformance by small-cap stocks has resulted in more market participants looking at the small-cap segment," he added.
Small-cap indices have also outperformed the large-cap companies over one year period ended May 31, delivering a return of 36.22 per cent. S&P BSE SmallCap Select generated a return of 30.89 per cent for its investors.
Comparatively, large-cap has given a return of 20.78 per cent, while Sensex companies shelled out 18.22 per cent return for the one-year period.
In terms of market capitalisation, small-cap index on BSE has scaled up by 36 per cent, while the value of large-cap companies increased by 24 per cent -- much lower than small cap indices, in the one-year period ended May 31, 2017.
According to Malla, there has been a paradigm shift in investment patterns as market participants are now going beyond traditional large-cap companies and venturing into companies in the mid-cap and small-cap segments.