What are small caps?

If you refer to Wikipedia, you’ll find Small Caps defined as stocks with market capitalisations of less than $US1 billion.

In the Australian context, the S&P/ASX Small Ordinaries Index is the standard benchmark. It consists of the bottom 200 companies of the ASX’s 300 largest companies, after adjusting market cap size for “free float”. The range of market caps in the Small Ordinaries is enormous - stretching from $119m to over $7 billion. The average is $1.235 billion (as of September 30, 2018).