Market Anomalies: Size Effect vs. Value Effect

Active equity investing often seeks to exploit market anomalies to achieve superior returns. One such anomaly is the size effect, which suggests that smaller companies tend to outperform larger companies over the long run. Another example is the value effect, where stocks with low price-to-earnings ratios yield higher returns than those with high ratios.

In light of these theories, compare and contrast the size effect and the value effect as market anomalies. Discuss how these anomalies can be utilized in an active equity investment strategy and provide supporting examples to illustrate your points.