The FTSE 250 Index, has been the surprising star performer of 2012, as investors put their money behind companies they are more "comfortable with" amidst a turbulent economic climate.
London's second-tier index has reached a record high after rising nearly 23% so far this year.
A traumatic year for the eurozone, a slowdown in the powerhouse Chinese economy and fears the United States will go over its "fiscal cliff", are among the reasons why the understudy index has soared into the lead.
Success stories in the FTSE 250 include low-cost airline easyJet and department store Debenhams, which has turned its business around in the last four years.
Dixons Retail has seen off rivals Comet and Best Buy, while value companies such as Domino's Pizza and several pub chains have also been helped by agile business models as consumers look to save money.
Michael Hewson, senior market analyst at CMC Markets, said many investors favoured the FTSE 250 Index because they are more comfortable with companies they are familiar with.
He said: "The FTSE 100 Index may be a global index but as a barometer of the UK economy it is pretty useless given the number of resources stocks in it.
"A lot of these companies do no business in the UK and have very opaque corporate governance which suggest that shareholders would have little or no influence on board decision making."
Investors were also cautious about the banking sector due to well-documented scandals and the prospect of increased regulation.
London's blue-chip index, the FTSE 100 Index, is currently 7% higher than at the start of the year and has come close to the 6000 barrier in recent weeks.
But the best FTSE 100 performers of the year are somewhat surprising.
Lloyds Banking Group has produced a stellar performance by rising from 27p to 49p, as investors become increasingly comfortable that under chief executive Antonio Horta Osorio it has reduced risks on its balance sheet.
Costa coffee owner Whitbread also made steady progress throughout the year, climbing by around 60% as its coffee and hotel businesses continue to grow and it benefits from the adverse publicity over the tax affairs of rival Starbucks.
The rises mask periods of panic in the markets amid ugly economic conditions and at times political stalemate.
In May, £80 billion was wiped from the value of London's leading share index in just one week when Moody's Investor Service downgraded 16 Spanish lenders, including the UK arm of Banco Santander.
Investors were spooked by the prospect of a multibillion-euro bailout for Spain after the yield on 10-year bonds neared the levels which pushed Greece, Portugal and Ireland into taking financial support from the EU.
However investors have now become more optimistic after the European Central Bank (ECB) unveiled a bond-buying rescue plan in September.
Fears of a so-called "Grexit" from the euro were also calmed as billions of euros of bailout loans to prevent the country from going bankrupt were approved this year.
With talk of a eurozone break-up calmed, investors have turned their attention across the Atlantic.
In September the FTSE 100 Index soared to its highest level in six months, after the US Federal Reserve unveiled a third round of quantitative easing, worth 40 billion US dollars (£25 billion) a month.
London and world markets have become increasingly nervous in recent weeks as the US nears its fiscal cliff of automatic spending cuts and tax rises. With days left until the January 1 deadline, investors are starting to doubt whether politicians will be able to find a deal to avoid it.
As well as problems in the US and the eurozone, investors also had a slowdown in the Chinese powerhouse economy to contend with, meaning some of the worst performing shares have been London-listed mining stocks.
Anglo American shares are currently down 18% over the year, while Evraz has fallen 33%.
In terms of prospects for next year, a resolution to the US fiscal cliff is top of the City's wishlist.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said the world's largest economy could either depress sentiment or turbocharge it.
He said: "The fiscal cliff is an immediate concern, but it seems increasingly likely that there will be a short-term measure to avert something which, by consensus, could wipe 4% from US GDP."
In the eurozone, Mr Hunter said a concrete debt reduction plan along with a clear effort to promote growth will be central in deciding whether the area has any chance of a return to some normality in 2013.
He said there remained a number of issues for the banking industry next year, with further regulatory challenges and fines likely, but his stock to watch was Barclays, which has already paid its fine for Libor fixing.
Mr Hunter said: "2013 could be a seminal year for Barclays and, whilst the obstacles are many and varied, there are already signs that this is a company on the mend."
In 2012 the FTSE 100 Index yielded 3.7% on average for dividends in what Mr Hunter judged to be a significant return for investors in a complex year.
He said corporate earnings had been strong during 2012 and enabled the strongest companies to have accumulated ever increasing amounts of cash.
Regardless of how they decide to deploy the cash - whether through dividends, mergers and acquisitions, share buybacks or capital spending - it should be positive for markets in the year ahead, he said.Suggest a correction