UK small cap funds 'surprise' with outperformance since Brexit vote

Average product returned 33.13% over past three years

The IA UK Smaller Companies sector has been the only open-ended UK equity sector to beat the FTSE All-Share since the UK voted to leave the EU, research from Investment Week and data from FE shows.

This is despite the fact UK small caps have a reputation for being more dependent on the UK economy than their larger, global-facing peers. The average UK smaller companies fund, sitting in the Investment Association's UK Smaller Companies sector, has returned 33.13% since 23 June 2016 to 19 March, while the FTSE All-Share and FTSE 100 indices have gained 27.19% and 28.41% respectively. Meanwhile, the average return of the IA UK All Companies and IA UK Equity Income sectors resides at a respective 22.27% and 18.15%. Why have small-cap funds outperformed? Ben Yearsley, managing di...