Henderson's McQuaker warns on 'vulnerability' of small and mid caps

Sticks to large cap exposure

Henderson head of multi-asset Bill McQuaker believes small- and mid-cap stocks could start looking fragile, despite their recent strong run, leading him to retain his exposure to large-cap peers.

McQuaker (pictured), who runs a number of funds and trusts including the group's multi-manager range, said the success of smaller companies since 2009 could reverse in the coming years. In 2015 alone, the FTSE Small-Cap index rose 9.2% and the FTSE 250 was up 11.7%, compared to a fall of 1.3% for the FTSE 100.   He said: "The outperformance of small and mid caps has coincided with low interest rates and quantitative easing. "But they could prove to be vulnerable as we enter a potentially more volatile market, with QE liquidity peaking and interest rate rises moving closer." The ...