FTSE Small Cap index driving outperformance

The cyclical stock bias within the FTSE Small Cap index has been the main driver of its recent outperformance. Over three months to the end of June 2003, the small cap index has outperformed both the FTSE All-Share and the FTSE 100. From the end of March to the end of June, the FTSE Small Cap has risen 29.10%, outperforming the All-Share, which was up 14.62%, and the FTSE 100, which had grown 12.52%. Richard Wilmot, fund manager at Mellon, says following the large reduction in interest rates, the market is now anticipating a rebound in economic activity to occur in 12-18 months' time...