60 seconds with Andy Brough on UK mid-caps' enduring appeal
Earnings and dividend growth, combined with the high level of takeover activity, mean UK mid-caps have not lost their appeal after the Brexit vote, says Andy Brough.
Recent months have led some investors to question whether UK mid-caps are still an attractive place to invest.
We’ve seen disappointment connected to domestically-focused UK companies as investors fled that part of the market after the Brexit vote.
Some people believe large companies are safer and so they’re taking their investment away from mid-cap stocks to move into the larger-cap area of the market.
But, you invest in equities to participate in a rising stream of dividends from a rising stream of earnings and, if you look over the course of history, that is where the mid-cap area of the market has excelled.
We passionately believe that mid-caps remain attractive. Not only from an earnings and dividend growth perspective, but also – more importantly – because we see far more takeovers in this area of the market and over time that’s really driven value in mid-caps.
This communication is marketing material. The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy.
The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions.
Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.
Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors.
Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.