UK small caps available on attractive valuations

Low interest rates and good valuations make for an attractive UK small-cap market but risks remain in the continued strength of the consumer. Kenny Watson, investment manager for UK smaller companies at Britannic Asset Management, says small-cap stocks have outperformed large caps on a year-to-date basis, primarily because the bear market has pulled down FTSE 100 stocks. He is currently favouring smaller companies because their low P/E ratings provide better value than other sectors, while the yields on offer stack up well against the fixed interest sector. Head of UK smaller compani...