Tough year for UK Smaller Companies sector

In a tough year for small caps, with average fund down 35%, best performers have steered clear of value trap companies and consumer discretionaries

It has undoubtedly been a tough year for the UK Smaller Companies sector, with the average fund losing 35% over the past 12 months according to Morningstar. Small caps fell out of favour as investors sheltered from market volatility in more stable and liquid large-cap companies. Veteran managers with experience of past bear markets fared better than their peers, including Standard Life Investments' Harry Nimmo. Over three years to 14 July, his £389m UK Smaller Companies fund delivered 57.05%, ranking first in the peer group. Nimmo said: "The difference with this bear market, which i...