Economic growth key to small-cap performance

The outlook for smaller US companies looks positive for 2003 but is dependent on the continued growth of the economy and the resolution of political uncertainty over Iraq. Gartmore senior investment manager Nick Ford says investors have become more comfortable with mid caps in recent years, which has led to outperformance over large caps and could help shepherd investment into the small-cap sector. Smaller companies are more geared to changes in economic activity, he adds, providing greater scope for a positive turnaround during times of economic uncertainty and maximising the benefits...