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Brendan Gulston talks to Investment Week about the common misconceptions surrounding UK small caps

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Brendan Gulston discusses how the expected continued market volatility and macroeconomic uncertainty in the UK throughout 2019 will create increased opportunity in the small cap market. 

While large-cap businesses are generally impacted by macro factors, smaller companies tend to operate in more insulated, niche markets where they are well-positioned and have the ability to react in a more agile manner when facing wider economic headwinds.

However, the reality is vastly different to the perception. As political uncertainty floods the UK market, smaller companies are thriving against larger, more cyclical peers.

 

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This misconception can be attributed to the comparative lack of research around this area of the market, which attracts less attention from professional research organisations and brokers.

As a result, many investors are unaware the UK is home to a vast number of high-quality smaller companies, generating attractive and sustainable levels of income. 

And with many smaller companies trading at sizeable valuation discounts, smaller caps offer an attractive hunting ground for investors.

To continue reading please visit Investment Week. 

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