Where is the earnings growth and value outside of the FTSE 100?

Investors searching for sustainable and structural growth opportunities can still find a more attractive combination of earnings growth and value outside the FTSE 100, according to Fraser Mackersie is manager of the Unicorn UK Growth fund.

In 2015, smaller companies enjoyed a strong year, with the Numis Smaller Companies index generating a total return of 11.1%, well ahead of a fall of 1.3% by the FTSE 100. Market forecasts for earnings growth in 2016 currently predict growth of just 4% on the FTSE 100, compared with 8.9% and 9.5% respectively on the FTSE 250 and FTSE Small Cap index. Despite the recent period of outperformance, smaller companies continue to offer attractive value - the FTSE Small Cap trades on a 13.1x forward earnings multiple for 2016, compared to 15.3x on the large-cap index. Larger capitalised gr...