View more on these topics

Downsize your portfolio

The average UK smaller companies manager will outperform their benchmark, the FTSE small cap index, over most periods – in fact, by 29 percentage points over five years and 79 percentage points over 10 years to May 1 whereas the average UK equity unit trust has underperformed the FTSE All Share index by 10 percentage points over five years and 50 percentage points over 10 years.

I believe that UK small caps will deliver profitable returns over the next year and will outperform the market over the next three years.

Resolution Management’s David Clarke confirms this view as small caps are currently being priced at a discount.

Over the longer term, these companies should start to outperform large caps again.

Over the very short term, it is impossible to predict performance as volatility can be huge and individual shares can move up or down by up to 30 per cent in a day.

A lot of niche companies are still performing well and increasing their profits substantially, as well as quite a lot of companies in the industrial sector and the oil and gas sector where some suppliers to the major oil companies are continuing to flourish.

Resolution’s smaller companies fund has outperformed the sector average by substantial amounts over two and three years, being up by 48 per cent over three years against the sector average of only 23.4 per cent to May 1, 2008.

Other smaller companies trusts I like are Artemis UK smaller companies, M&G smaller companies and Standard Life UK smaller companies.

I believe it is time to move out of large caps and mid caps and to invest in smaller company trusts.


Axa Fofs will go to Architas

Axa has revealed that its Axa Framlington range of six funds of funds will pass to its new multi-manager investment firm Architas.

Phone - thumbnail

Pension Wise — now taking calls…

Those with decent-length memories will recall that in the 2014 Budget statement George Osborne announced the new (and entirely unexpected) pension freedoms. The new rules come fully into force in less than two weeks.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm