Large caps to outperform, as rates rise hits small caps

Large-cap stocks should outperform small caps following the European Central Bank's (ECB) decision to raise interest rates, according to investment boutique 2CG. Charles Glasse, one of the co-founders of 2CG, says: "As rates have been rising across Europe, small caps will face difficulties as these types of companies take out bigger loans than larger companies and will generally be more sensitive to any changes. It is possible their balance sheets will become stretched as a result." Glasse has decided to slant 2CG's European portfolios to favour large caps on the back of the ECB's d...