Despite a broader downturn in local equities, shares of China’s small and medium-sized companies are showing signs of entering a bull market. This is evident from the recent performance of the Beijing Stock Exchange 50 Index, which tracks early-stage innovative companies listed in the capital. The index rose 3.1% on Monday, marking a gain of over 19% since October.

What is particularly noteworthy about this outperformance is that it has beaten its larger, tech-heavy peer by 12 percentage points and the benchmark CSI 300 Index by 16 percentage points. This makes it a bright spot in China this quarter.

Several factors are contributing to this growth. For one, the wider fluctuation range of 30% allowed for constituents in either direction on the Beijing board compared to a span of as much as 20% for the Shanghai and Shenzhen gauges is seen as a catalyst for this growth. Additionally, investors’ light positioning in these companies and regulators’ consideration to include eligible securities into the CSI cross-market index system are also contributing factors.

The Beijing exchange was launched two years ago with the intention of helping small firms raise funds and make the nation’s financial markets more multifaceted. The largest of around a dozen exchange-traded funds tracking the index have assets of about 228.8 million yuan ($31.9 million), indicating moderate investment compared to other options.