Depends on how larger company stocks are doing relative to a broader slice of the market. Same for US vs. various international indexes. Even if you're diversified in a number of different index funds, that doesn't mean you should necessarily be "forced" to invest, for example, in areas of the world that seem to have systemic issues (at least with respect to stock market performance).
With respect to US equities, the S&P 500 and the Russell 4000 have performed fairly similarly over the past 5 years; which has performed better depends on the time period you look at. The NASDAQ has been a little bit higher overall but, of course, it also had a bigger drop if you look at a longer horizon.
The theory is that all known pros and cons are priced in; unless you're a big enough player to move the market, investing a dollar in any one company is as good as investing in any other. This assumes a perfect market and is therefore pretty dumb, but the guys that move the prices are probably better at pricing risk and upside than I am, so I can't take advantage of the gap between theory and practice anyway.
The upside of diversification is that your return simply get closer to the mean as opposed to varying wildly as it would if invested in a single company's stock. You basically get increased predictability at no cost.
With respect to US equities, the S&P 500 and the Russell 4000 have performed fairly similarly over the past 5 years; which has performed better depends on the time period you look at. The NASDAQ has been a little bit higher overall but, of course, it also had a bigger drop if you look at a longer horizon.