Small caps have outperformed mid and larger stocks globally over the past few years but, following recent re-ratings, Annabelle Williams asks whether the income opportunity now lies in large caps.
In recent years, mid- and small-cap indices have outperformed UK-listed large caps. Many internationally facing businesses have been hurt by exposure to emerging markets, while smaller, more domestically focused names have begun to thrive as the UK economy recovers. But the opportunities for income managers could now be shifting towards large-cap stocks. In the five years to 10 March, the FTSE 350 has risen 82%, well ahead of the 72% return from the FTSE 100 over the same period. Some of the best-loved income stocks on the FTSE 100 have performed weakly. British American Tobacco, for ...
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