Back to the future: Will mid caps steam ahead again?

The tide has turned against mid caps as tourists have retreated and investors head to mega caps for yield. But with lower prospects for growth among FTSE 100 stocks, should investors be favouring mid caps again? Ecclesiastical's Andrew Jackson investigates.

Picking stocks has been rather more testing in 2014, as a result of elevated initial valuations, tempered earnings expectations, high IPO issuance, and geopolitical risks. As regional economic performance diverges and there is much speculation as to the appropriate policy response, investors banking on the presumed certainties of the post-financial crisis recovery have found themselves on the back foot. With their superior profit growth and strong share price performance, mid caps had become the pin-ups of the recovery. But as investor appetite for the sector has waned, it became a...