How an edge hides in
plain sight.
Illustrative. Small wins in every quality bucket. The blended average says the opposite.
|
Small |
Large |
Small edge |
| Quality stocks | 14 | 11 | +3 |
| Junk stocks | 6 | 4 | +2 |
| Blended universe | 8.4 | 8.9 | -0.5 |
Small won both matchups. But the small-cap universe is set 70 pct junk and the large-cap universe 70 pct quality, so the blended small number (8.4) still trails large (8.9). Compare like for like and small's edge (+2.5) walks right back in. The premium was buried under composition, never missing.