Industrial stock picks drive small-cap performance

Top-performing vehicles from Old Mutual and Standard Life Investments are heavily weighted towards industrial stocks via their bottom-up approaches

UK Smaller companies have enjoyed a favourable market background in recent years, driven primarily by merger and acquisition activity. Among the 49 vehicles in the sector, the average return over three years to June 2007 was 93.8%, according to data from Morningstar. Of the poorest performers, many have been heavily weighted in the Aim index, which has been blighted in recent years by a proliferation of poor-quality issues. Over the period, the top fund returned 157.01% to its investors, from a portfolio dominated by industrial stocks. The £590m Old Mutual Select Smaller Companies fund, ...