This article was originally written on 9 December 2015
Has the market been kind to your portfolio in 2015?
I have a feeling your answer may differ, depending on whether or not you own a large chunk of commodity and oil shares!
I was browsing through a list of the FTSE 100âs risers and fallers last night, and I was taken aback at just how severely the mega-commodity behemoths had crashed in 2015.
BHP Billiton has tanked by 43%… Rio Tinto has lost 31% of its value⊠and commodity trading giant Glencore has crashed by 71% in 2015 so far!
That doesnât make for pleasant reading for anyone who owned these goliaths of the resources market this year — and if youâre among them, I sincerely hope your fortunes improve in 2016.
But as I sat trawling through the numbers, something else dawned on me tooâŠ
The FTSEâs Biggest Names in the RedâŠ
It hasnât been a great year for a number of high profile FTSE 100 giants, even outside of the resources sector — many of them among the most popular shares owned by UK investors.
Emerging market bank Standard Chartered dropped 45%. British Gas owner and utility giant Centrica fell 24%. Supermarkets Tesco and Wm Morrison suffered another year of declines, 14% and 20% respectively.
And of the top 8 performing FTSE 100 shares this year?
I doubt many individual investors would have even heard of most the names — let alone owned them in their portfolios!
The two largest companies in that list were ÂŁ17bn CRHÂ — which sells cement and rubble — and ÂŁ7bn Mondi, which makes paper and packaging products.
The FTSE 100 has dropped 5.1% this year, but Iâd be willing to bet that most individual investors have found things even more challenging than that figure suggestsâŠ
âŠConsidering youâre a lot more likely to own the likes of Tesco and BHP Billiton than obscure packaging and cement companies!
So, itâs been a tough year for the FTSE 100 — and an even tougher year for the investors who own its most popular shares.
But itâs not been all doom and despair for everyone in 2015âŠ
That is, if you know where to look!
You see, while the FTSE 100 has lost 9% this year, the FTSE SmallCap index has actually gained 4.04% in 2015. Thatâs around a 13% differential in performance⊠and the critical difference between profit and loss.
Chart from Google Finance — red line is FTSE 100, blue line is FTSE SmallCap Index
The small-cap market is home to all sorts of attractive, niche, fast-growing businesses — the sort that my team and I research and recommend over at our premium advisory service, Motley Fool Hidden Winners.
Itâs not just over the past 12 months that small-caps have outperformed, too.
Letâs zoom out and take a look at performance over the last five yearsâŠ
Chart from Google Finance — red line is FTSE 100, blue line is FTSE SmallCap Index
Astonishing, right?!
The FTSE SmallCap index has utterly thrashed the FTSE 100 blue chip index in the last five years — thanks to performances from companies that most investors have probably never even heard of.
Itâs in this arena that it really pays to know what youâre looking for — especially given the added risks of investing in the less liquid, more volatile world of small-caps.
Will small caps continue to outperform the titans of the FTSE 100? Thatâs impossible to say with any certainty. But going into 2016, I can tell you that with my own personal portfolio, Iâm on the hunt for the marketâs âHiddenâ championsâŠ
And from what Iâm seeing⊠when you know where to look⊠thereâs no shortage of compelling opportunities to be found.