Bignell sees no reason for small-cap premium

Inv Perp manager expecting a quicker-than-expected return to outperformance for Europe's small-cap sector

Despite longstanding negative sentiment towards small and mid caps, they will begin to outperform sooner than the market expects according to Invesco Perpetual's Adrian Bignell. This is partly due to the growth of hedge funds over the past decade, he said. "A big change from 10 years ago is the presence of hedge funds, which will come back and pick up inefficiencies," he added. Manager of the group's European Smaller Companies fund, Bignell said small caps in Europe have actually outperformed large by 1% to 2% this year, with many on 11x earnings and producing dividend yields of 4%, a...