Why invest in UK mid-caps? The simple answer is that – with the exception of the 2008 crisis – they have consistently outperformed the wider market over the past 15 years.
But why should this outperformance persist and why should investors pay more attention to UK mid-caps right now? I believe there are three key reasons: firstly, they provide exposure to the UK’s domestic recovery. Secondly, mid-cap companies are generally more flexible and better suited to uncertain times than large-caps. Thirdly, entrepreneurs/founding families, with their longer-term investment horizons, are more likely to still be involved in relatively small companies.
1. Exposure to the domestic recovery
As witnessed by the recent strength of sterling against almost all currencies, the economic recovery in the UK is clearly now taking root. In his testimony to the Parliamentary Committee on 24 June, Mark Carney explained that the Bank of England now expects real earnings growth…continue reading.
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This article was provided by Neptune Investment Management and does not necessarily reflect the views of Citywire