Compelling opportunities in smaller companies are being overlooked by investors. James Henderson, manager of the Henderson Opportunities trust, addresses some of the myths surrounding the space.
The discount at which small-cap and AIM stocks are trading has deepened and there is great value to be found at the moment. Despite this, investors are still reluctant to look at the area for growth. The UK’s lacklustre economic environment has made exposure to domestic companies less appealing, while negative macro news has caused investors to shelter in the larger ones. However, the UK’s economic outlook is not as vital to the success of smaller companies as some may believe and it is worth noting that the scope of businesses in this area offers attractive diversification opportunities...
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