Troy's Lyon fires warning over mid and small-cap stocks

Sebastian Lyon, manager of the Troy Trojan fund, has warned shares in mid- and small-cap stocks are currently ‘priced for perfection', after valuations shot up substantially over the past decade.

The manager of the £2.2bn fund expects future returns of ‘illiquid small and mid-cap stocks' to be considerably lower, and has trimmed his exposure to this area of the market. In February, Lyon (pictured) sold a position in AG Barr, owner of a variety of soft drinks brands, despite the strong performance of the stock, as worries over valuations in the small and mid-cap space escalate. "The high returns the company has generated have allowed [the company] to pay a healthy, growing dividend which has risen by 125% during our period of ownership," the manager said. "So why have we dec...