UK Smaller Companies sector bucks broader market with positive returns

Climate of low interest rates has allowed small companies that rely on borrowing to grow and provide good opportunities for investors

The UK Smaller Companies sector, encompassing UK equities of companies that form the bottom 10% by market capitalisation, had a buoyant 2009 with returns boosted by a summer market rally. The current climate of low interest rates has allowed small companies that rely heavily on borrowing to grow. Small-cap stocks tend to maintain high betas to relative indices, which means they outperform and flourish in an upturn and under-perform and go bankrupt in a downturn. UK small caps reversed a December slump by registering the only positive returns within the broader UK equity market in J...