Top-performing UK small-cap funds navigate through market sell-off

Lack of financials exposure helps sector outperform other peer groups over one year but headwinds are building.

Smaller companies were one of the chief victims of the 2008 credit crisis as investors fled into more liquid investments. This time around, the first sector in the firing line was financials, which is relatively under-represented in the smaller companies sector. Nevertheless, it has still been a difficult time for those with a pro-cyclical tilt to their portfolios, and some of the best longer-term performers in the sector have been caught out. Some have shifted their positions, while others have used market falls to top up their holdings, but despite positioning changes, the averag...