THIS IS AN ADVERTISING FEATURE
By Abby Glennie
-Smaller companies have done well as economies have started to recover
-Cyclical companies have rallied in recent months on the back of stronger economic data
-We are maintaining our focus on quality companies that score highly on ESG metrics
Smaller companies often lead stock markets in a recovery phase. This time, as the world emerges from the pandemic, has been no exception. However, investors need to be careful in their exposure to ensure they aren’t left holding poor quality companies, bought for their cheapness rather than their long-term durability.
Over the past year, since the lockdowns started across the UK, the IA UK Smaller Companies sector tops the league tables, with the average fund rising 71.7% (source: Trustnet, to 29 March 2021). There are plenty of reasons for this strength: smaller companies often reflect the most dynamic areas of the economy. The sector is full of profitable companies, paying good dividends with good governance. The sector had been hit unfairly by fears of economic stagnation and the…
