The small-cap effect

Smaller companies may outperform for a multi-year period, says Gartmore's Gervais Williams.

Last week Capita Registrars, which provides share registration services, released its quarterly UK Dividend Monitor Report. The report highlighted the parlous state of UK dividend distributions and led one commentator to comment the hardest job in fund management must be an income fund manager. What, then, would he make of managing the small-cap asset class, where the institutional and mutual fund outflows have been persistent for a decade, and investment trusts trade at heavy discounts to their underlying assets? For 20 years now, the duration of the credit cycle, smaller companies have...