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Invesco is a client of Kepler Trust Intelligence. This material is based on public factual information only, is not intended to be an invitation or inducement to invest and makes no recommendation as to the merits or otherwise of any investment in this product. Please see the important information by following this link or at the bottom of the page.
The UK equity market is one of the most diverse stock markets in the world. Historically smaller companies have tended to outperform their larger brethren, particularly when taking a medium-term investment horizon (Figure 1). We see a number of reasons for this. Smaller businesses tend to be less well researched by the market, leaving room to discover genuinely undervalued stocks. Small-caps also often have a high proportion of founder ownership, which encourages management to focus on long-term shareholder value creation. And, smaller companies are typically more nimble, allowing them to exploit niches in existing industries and generate organic growth.
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