It’s fair to say that investor sentiment towards small-cap shares has been incredibly benign this year, one of the driving factors behind the eye-catching share price gains on some of my share recommendations: the FTSE SmallCap index is up 12 per cent in the year to date, and the FTSE Aim index, a core hunting ground for my stock picks, has been on an absolute tear, rising by 20 per cent.
The 10 small-cap stock picks in my 2017 Bargain Shares Portfolio have done even better, producing an average return of 24.6 per cent on an offer-to-bid basis since publication in early February. To put that performance into some perspective, an FTSE All-Share tracker fund has produced a total return of 8.1 per cent in the same period, and even the trailblazing FTSE Aim index lags 10 percentage points behind my portfolio.
Clearly, the good times will not last forever, which is why I have top-sliced some holdings in the portfolio and also across my watchlist, or banked profits entirely if risk-adjusted upside potential no longer warrants maintaining an interest. For good measure, I have also unearthed a raft of undervalued and under-researched special situations to invest your gains into.