Small is beautiful

SMALL IS BEAUTIFUL

Maria Merricks investigates some of the leading funds in the small cap sector and the alternative strategies on offer.

The case for small cap investment is compelling. If you are an investor willing to step into the riskier end of the equity spectrum, potentially stellar long-term returns means it could be well worth your while. Since 1955 the HGSC Total Return Index of smaller companies has outperformed the broader FTSE All Share Index by an average of more than 3% per annum. According to Paul Marriage, manager of the Cazenove UK Smaller Companies fund, this means a £1,000 investment in small caps 55 years ago, would be worth well over £2m today. All very well, but the constraints of a UK smaller ...