Are UK equities 'too difficult' for asset allocators to invest in now?

The long-term attraction of the UK smaller companies market is beyond doubt.

According to Numis, with dividends reinvested, its Smaller Companies index has grown 18x in real capital gains terms since 1955 (when records began). Over the same period, the FTSE All-Share has grown by only 3.5x. UK smaller companies undoubtedly look cheap. On a 12-month forward basis, the Numis Smaller Companies index is trading on a P/E ratio of 10.8x, compared to 12x for the FTSE All-Share. Both indices look cheap relative to history, with the long-term average for the UK market being a P/E multiple of just over 13x. Long-term income opportunities in UK micro caps The cheap he...