Perpetual foresees an end to polarisation in the UK stockmarket as mid-cap shares return to favour.
The fund firm has been one of the leading proponents of large caps, urging investors to avoid smaller companies.
But UK fund managers Stephen Whittaker and Neil Woodford see an end to the two-tier UK market which has lasted 18 months. They point to startling growth in the mid-cap market in recent weeks, with the FTSE 250 outperforming the FTSE 100.
They say the rally is sustainable due to low interest rates and the weaker pound. It will also be driven by mergers and acquisitions activity while fears of a recession are easing.