Your IndustryAug 28 2014

Guide to Investing in Smaller Companies

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CPD
Approx.50min

    Guide to Investing in Smaller Companies

      pfs-logo
      cisi-logo
      CPD
      Approx.50min
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      Introduction

      By Emma Ann Hughes
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      The definition of what constitutes ‘smaller’ can vary and includes some fairly large business - F&C, for example, views a company with a market capitalisation of between £100m and £1.6bn as ‘smaller’.

      What is agreed though is that smaller companies are considered to have more potential for rapid growth because they are less mature and can grow from a lower base. At a time when many are speculating that a prolonged rally is losing steam, this could be vital for investors.

      But these companies also often have a business structures that can be less developed and their cash flows are more unstable – it is vital to pick a green shoot that will thrive rather than one that will quickly dwindle and die.

      This guide will explore how UK Smaller Companies funds perform in different market conditions, what part these vehicles should play in an investor’s portfolio, and how to make sure you pick the best one for your clients.

      Supporting material provided by: Steve Kenny, head of retail sales at Kames Capital; James Dalby, market intelligence manager of Aviva; Patrick Connolly, Certified Financial Planner at Bath-based Chase de Vere Independent Financial Advisers; and Catherine Stanley, manager of the F&C UK Smaller Companies fund.

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