Small cap sector benefits from good research base

The smaller companies universe is increasingly being seen as an incubator for growth stocks rather than a proxy for manufacture and retail. There has been an increasing flow of new technology into the sector at the same time as mergers, management buy-outs and purchases have removed many old world stocks such as builders, retailers and smaller manufacturers. Richard Penny, fund manager of M&G's newly launched Innovator Fund, says the sector has become "a cheap and early way of buying the leading technology stocks of tomorrow." Increasingly, he says, the small cap universe is populated w...