UK equities have rebounded strongly following this year’s sell-off, and some of the biggest gains have been made by smaller companies. The FTSE Aim 100 and FTSE Aim All-Share indices, for example, rose more than 45 per cent between 20 March and 8 June, compared with the FTSE 100's 25 per cent increase. And some individual smaller company stocks have made particularly huge gains in recent months.
Proven investment process
Strong track record
Relatively high ongoing charge
These stellar returns and the appeal of backing high-growth companies might tempt you to dive into this part of the market. But the risk and volatility inherent in smaller company stocks, as well as the sheer amount of due diligence required to invest in them successfully, means that there is a strong case for getting exposure to this part of the market via a smaller companies fund.