Paul Jourdan on the flight towards global small cap

SMALL CAPS

The ability of UK small-cap investors to focus their returns on the performance of overseas markets looks increasingly important, writes Paul Jourdan of Amati Global Investors

Conventional wisdom has it that UK small-cap funds are focused on the domestic UK economy, in comparison to large-cap funds which have inherently more international exposure. With the non-UK earnings streams of the FTSE 100 Index stocks currently running at around 80% this has rarely looked more true. Some small-cap sectors, such as engineering, have always had a large global component. However, following the last recession in 2003 the UK small-cap market has been through a period of rapid internationalisation in terms of the underlying companies themselves. This was partly due to the ex...