ASX small-cap shares put in a solid performance last year, with the S&P/ASX Small Ordinaries Index (ASX: XSO) rising 5.54% and delivering total returns, including dividends, of 8.36%.
By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) rose by 7.55%, and the benchmark S&P/ASX 200 Index (ASX: XJO) lifted by 7.49%, with both delivering total returns of 11.44%.
The S&P/ASX 300 Index (ASX: XKO) rose by 7.47% and gave investors a total return of 11.39%.
Small-caps have market capitalisations of between a few hundred million and $2 billion.
The ASX Small Ords Index measures the performance of the 200 companies ranked between 101 and 300 in the S&P/ASX 300 Index (ASX: XKO).
Whilst the Small Ords Index underperformed its ASX 200, ASX 300, and All Ords counterparts, it's worth noting that many of the top stocks of the year for share price growth were, indeed, small-caps.
Of the top 10 ASX 200 shares for price growth, six were small-caps.
Of the top 5 ASX All Ordinaries shares, four were small-caps.
Top 3 ASX small-caps for price growth in 2024
Mesoblast Ltd (ASX: MSB)
ASX small-cap biotech Mesoblast exploded, with its share price rising 900% after it won approval from the United States Food and Drug Administration (FDA) for its lead drug Ryoncil, or remestemcel-L, last month.
Zip Co Ltd (ASX: ZIP)
In an amazing comeback year, this ASX small-cap financial share soared 352.5%. The buy now, pay later company has turned itself around by prioritising profitability over market expansion.
IperionX Ltd (ASX: IPX)
This ASX small-cap materials share soared 295.7% in 2024. IperionX is a developer of sustainable critical mineral and material supply chains in the United States. One of its priority metals is titanium.
Other top-performing ASX small-cap shares
| ASX small-cap share | Share price growth in 2024 |
| Nuix Limited (ASX: NXL) | 232.6% |
| Superloop Ltd (ASX: SLC) | 226.9% |
| Life360 Inc (ASX: 360) | 198.2% |
| Spartan Resources Ltd (ASX: SPR) | 171.2% |
| Sigma Healthcare Ltd (ASX: SIG) | 162% |
| Pinnacle Investment Management Group Ltd (ASX: PNI) | 126.7% |
| Clarity Pharmaceuticals Ltd (ASX: CU6) | 120.6% |
| Codan Ltd (ASX: CDA) | 88.3% |
Good value among ASX small-cap shares, says fundie
ASX small-cap shares may have an advantage in the new year, with central banks worldwide now cutting interest rates.
Young companies tend to carry a fair bit of debt to fund their growth. Therefore, rate cuts can substantially lower their costs.
Simon Conn, senior portfolio manager at Investors Mutual, says there is better value among ASX small-cap shares today.
In The Australian, Conn said:
There's still this divergence between small and large cap industrials.
But for a stock picker like us there are still plenty of opportunities.
We own some stocks that trade at big discounts to their large cap peers and it's just a valuation disconnect.
