Lack of liquidity blamed for 'aggressive' mid-cap sell-off

Mid-cap stocks have suffered a harsh and indiscriminate sell-off in recent weeks, and managers have pointed to liquidity concerns as a possible trigger for the falls.

Over three months to 22 May, the FTSE 250 index is down 4.4% versus a 1% rise for the FTSE 100, with some mid-cap stocks falling 20% or more during this period, despite the absence of any obvious catalysts to drive down their price. These include popular mid-cap names, such as Thomas Cook, Foxtons, and SuperGroup, whose share prices are down 12%, 22% and 41%, respectively over the period. David Griffiths, manager of the Kames UK Equity Absolute Return fund said this sell-off is the most aggressive he has seen in more than a decade of UK equity investing. He attributes it to liquidity ...