Bouncing back: Why we shouldn't write-off small caps just yet

This summer’s market volatility left UK Smaller Companies fund managers with a challenging backdrop. With investor outflows of £34m in August, the sector was the seventh worst selling of the IMA’s 32 overall, according to the Association. But if the market turmoil of 2008 was anything to go by, managers should not have been surprised. UK Smaller Companies was one of the biggest casualties of the recession as panicked investors fled from the riskier end of the equity spectrum into more liquid asset classes. The IMA’s classification stipulates funds in the sector must invest at least 80...