Aim small for outperformance

Top small-cap UK fund manager, Gervais Williams from Miton Group, explains to IGTV’s Victoria Scholar why UK small-cap stocks have been outperforming and gives his top stock and sector picks. 

Since the Brexit referendum, small-cap stocks have outperformed in the UK. The FTSE AIM All Share Index is up nearly 60% since the vote, while the FTSE All Share Index has gained less than half that (28%). From May 2017-2018, Miton’s UK Small Companies Fund returned 14.9%, outperforming the FTSE AIM All Share Index (10.5%) and the FTSE All Share Index (6.5%). Gervais Williams, senior executive director at Miton Group, told IGTV that the outperformance of his fund has been driven by ‘individual stock selection. There are individual companies which are hopefully able to take advantage of the uncertainty out there’. Williams said that while the small-caps are not entirely insulated from international uncertainties, they are small and agile, which provides an opportunity to outperform the larger-cap stocks.

Consumer recession around the corner?

Last week's first quarter (Q1) UK gross domestic product (GDP) was revised to be slightly higher (to 0.2%), thanks to increased household and government spending according to the Office of National Statistics (ONS). However, the British Chambers of Commerce (BCC) this month reported that it expects the UK economy to post its worst calendar year of growth since 2009. The business group downgraded its outlook for consumer spending, business investment and trade. Williams told IGTV there is ‘a lot of uncertainty out there’, pointing to political instability, the countdown to Brexit and rising interest rates from the Bank of England (BoE). Williams said that ‘there may be a consumer recession around the corner’.

Brexit

Find out what Brexit could mean for the markets and how a hard or a soft exit from the EU could affect traders.


Stock picks: Amigo, Amino, Diversified Gas & Oil

Williams told IGTV that Amigo and Amino are among his top stock picks in Miton’s UK Small Companies Fund. Sub-prime lender Amigo went public in London for a valuation of £1.3 billion at the end of June. He said ‘we remain very upbeat on this one, given that it has not moved to a large premium in the aftermarket’. Elsewhere, he believes Amino Technologies is ‘very much overlooked’ and he likes Diversified Gas & Oil from a dividend perspective.

Where next for the UK market?

The FTSE 100 posted its best quarter in 15 years in Q2 of this year, after sharp volatility in the first three months. Williams said there could be further spikes before reaching a peak. He suggested the FTSE 100 could push up towards 8000, but warned that we are likely to be near the end of the bull market. 

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

Find articles by analysts

Finn artikler av analytikere

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 79 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren.
Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger.
CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.