Smaller stocks, bigger returns

uk Growth

With real volume growth proving elusive for FTSE 100 companies it is time managers looked for opportunities in smaller companies where active investors can make the best of a more discriminating market

FTSE index funds have been the big losers of the post-Iraq stock market rally. Over the past six months, smaller companies have dramatically outperformed the Mid 250, on average, and mid-cap stocks have beaten larger companies by a wide margin. Investors no longer need fear being underweight in the FTSE's biggest stocks. Stockpicking investment is back in favour. Once it could be argued that the UK's major global companies had a monopoly on the best management and business strategies. Now share performance and quality of leadership in sectors such as pharmaceuticals and oils seem to bear ...