The Big Theme 

Small is beautiful over the long term

Small is beautiful over the long term

Including smaller company equities in your portfolio can result in better returns over the long term and diversification. Developed market smaller company stocks, in particular, can be more closely correlated with the economy of the country where they are listed, whereas large-cap stocks are typically more aligned with the global economy. This is the case with the FTSE 100 index, which is composed of the UK’s largest companies. These derive around 66 per cent of their revenues from outside the UK, while smaller UK companies tend to derive most of their revenues from the UK.

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