By James Carthew, QuotedData for Trustnet, 14 October 2024:
After a long period in the doldrums, there are glimmers of hope that investors might start to favour UK small-caps once again. Small-caps tend to outperform large-caps over the long term and the UK market is still very much cheaper than the US.
With that in mind, investors might be interested to see which stocks the experts are backing for a UK recovery.
Three stocks are clear favourites amongst the ‘big six’ UK small-cap trusts: Aberforth Smaller Companies, BlackRock Smaller Companies, Henderson Smaller Companies, BlackRock Throgmorton, JPMorgan UK Small Cap Growth and Income and abrdn UK Smaller Companies Growth.
Hill & Smith, XPS Pensions and Gamma Communications each features amongst the top 10 holdings of three of these trusts..
The ‘big six’ UK small-cap trusts have also uncovered a wealth of other opportunities. The largest stocks in each portfolio that do not feature within the top 10 holdings of their peers are as follows..
BlackRock Throgmorton has 2.9% in the UK and Irish building materials company Grafton, which could also benefit if the government can stimulate the construction sector. Whitestone has taken advantage of periods of weakness to top up his holding, feeling that market sentiment was unjustly against it. That stance has been rewarded over the past year.
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