"Companies that deliver good and growing income without the vulnerability of over-borrowing will become investments of choice," says Mr Williams. "Most of these will be found in the small companies universe. Many have net cash balance sheets, a stream of growing dividends, and offer low volatility and premium capital returns for investors."
An example of this is convenience food producer Greencore Group.
"This has number one or number-two position as supplier in this area to many supermarkets and being a food manufacturer makes a lot of sales. The company is generating a huge amount of cash so that its debt is falling fast, and it is now developing its market position in the US so that it has lots of scope to grow more in the next few years. Chilled food is not such a developed segment in that country.
"Greencore's negotiating position with the supermarkets has also got stronger and food price inflation is also justifying it increasing its prices.
"The company currently yields around 5.2 per cent and hopefully will yield 5.6 per cent next year. Analysts have also recently upgraded their forecasts for the company on metrics including earnings per share and price targets.
"The share price had fallen to around 50p after a rights issue last year but it has gone back up to more than 73p, so is rising against a falling market. We should see this continuing to improve and Greencore should maintain momentum whatever happens to the economy.
"The company has been under pressure for the last 25 years but is entering a period where it is likely to do better relative to the market and economy. This is a turning point for the company."
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