Unfortunately the decline in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) yesterday took the benchmark index down to 5,295 points and into negative territory for the year.
Although the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) also fell sharply, the small cap index is still holding onto a 7% gain year to date. Clearly small caps have been the place to be this year.
With a good number of fast-growing quality businesses in the index, I wouldn't be surprised to see this outperformance continue next year as well.
For this reason I think investors should look beyond blue chips and consider an investment in the following small-cap rockets:
Bionomics Ltd (ASX: BNO)
This Adelaide-based biopharmaceutical company has a strong pipeline of drugs which I believe could transform the company into a major player in the industry. One drug in its pipeline that gained attention recently was its BNC210 drug for the treatment of anxiety. Phase II trials found that the drug suppressed activation of the amygdala and outperformed the current standard of care, Ativan.
MNF Group Ltd (ASX: MNF)
Growing telco MNF Group has ambitions to become a leading global provider of wholesale voice minutes. Whilst it is best known for its VOIP services, the company's product offering is very diverse. MNF recently signed a mobile virtual network operator deal with the wholesale arm of Telstra Corporation Ltd (ASX: TLS). With this deal MNF can bring a new virtual mobile brand to market in under four weeks through its iBoss platform.
Nearmap Ltd (ASX: NEA)
Fast-growing aerial imaging company Nearmap has had a great year, but as far as I'm concerned it is just the beginning of much bigger things. This is thanks largely to the company's expansion into the United States. Although revenue from the country is still only small, I have been impressed with the strong growth it has delivered since it introduced a paywall for its services.
Touchcorp Ltd (ASX: TCH)
Fintech company Touchcorp provides payment software solutions for a growing number of clients including Afterpay Holdings Ltd (ASX: AFY), 7-Eleven, and Optus. Recent deals with Cornèr Bank in Switzerland and Change Up in Scandinavia are expected to provide the company with long-term transactional revenue streams. Touchcorp produced a strong half year result which saw revenue rise 21% to $22.5 million and net profit grow a stunning 71% to $7.2 million.
