UK small caps set to fall

Current market conditions will force small-cap valuations lower before the asset class starts to recover, according to UK smaller companies fund managers. Liquidity problems and a lack of confidence led by accounting scandals in the US will cause further turmoil for the sector, at least through the summer. But a rebound is anticipated in the second half of the year, possibly as late as the fourth quarter. Alex Ross, smaller companies fund manager at Aberdeen Asset Management, expects things to worsen before they improve. He has held a defensive stance in his portfolio over the past...