UK small cap companies brought in £240m of new cash in April
UK small cap companies are on a strong run of form this year as the vaccine roll-out has proved a success, while the fallout of Brexit appears to be a distant memory.
As a result, investors have put faith in the UK market, with inflows going to small cap companies in particular.
“The real stand out winner of the year to date has been the UK Smaller Companies market”, according to Laith Khalaf, financial analyst at AJ Bell, “which has enjoyed an incredibly hot streak of performance”.
“Indeed so far this year the FTSE Small Cap index has repeatedly set new record highs and now sits around 20% higher than pre-pandemic levels,” Khalaf added.
| Major market performance (and FTSE Small Cap) | H1 Total return % |
| FTSE 100 | 10.9 |
| MSCI AC Asia Pacific ex Japan | 5.7 |
| MSCI Europe ex UK | 12.3 |
| S&P 500 | 14.0 |
| TSE TOPIX | 0.5 |
| FTSE Small Cap | 19.4 |
UK small cap companies brought in £240m of new cash in April, an increase of £23m from March, according to according to Investment Association (IA) data.
“The smaller companies market does have a greater exposure to domestic revenues than the big blue chip index, so this is partly a vote of confidence in the UK economy but also a sign of investors positioning themselves for a risk-on market,” Khalaf said.
“The strong performance of the FTSE Small Cap explains why UK Smaller Companies funds dominate the top of the performancetable so far this year. At the bottom end of the performance table, gold funds find themselves out of favour, with a global economic recovery and rising bond yields both serving to undermine demand for the precious metal.”
The S&P 500 reach a record high on the final day of June to finish H1 on a strong note. Year-to-date the S&P 500 is up by 14%, outperforming the FTSE 100 by 3.1%