Valuations starting to look stretched

Over the past year smaller companies have performed extremely well in the UK as the economic revival has led investors to embrace risk and more willing to put money into this sector. However, fund managers now feel the steam has run out for this sector. Valuations now appear over stretched and managers have become cautious.. Dan Hanbury, fund manager of the UK Smaller Companies portfolio at Investec, says: "We are cautious in the New Year on smaller companies. It is likely the market will struggle and there will be a risk it could fall." According to Hanbury, smaller companies a...