Positive outlook for growth companies with healthy balance sheets

ON UK GROWTH

Low interest rates, government stimulus and benign inflation remain supportive of UK growth equities.

Many companies have strengthened their balance sheets over the past few years or so with lower levels of leverage, equities are a more attractive investment than private equity, property, cash and government bonds. In addition, investors will start to prize earnings growth more highly as it becomes scarcer following a tighter credit environment. This backdrop suits a focus on growth companies with healthy balance sheets, which are often to be found among larger caps. Large-cap companies are attractively valued in comparison to mid-caps and will also be able to finance superior growth. Am...