Part II: Where is the best value: Large, mid, or small caps?

Gene Salerno head of asset allocation and equities, Kleinwort Benson   Valuation drag Mid and small caps re-rated significantly in 2013, driven by multiple expansion rather than earnings growth. However, with profits at all-time highs, there is doubt as to whether this will continue. The FTSE 250 is currently trading with a median P/E of circa 18x, with dispersion between the most expensive and cheapest quintile stocks at its lowest level in 15 years. When compared to mega caps – trading at circa 12x, mid and small caps as a whole look to be at risk. However, large caps such a...