As we say goodbye to 2016 it’s time for my annual review of how the UK small cap markets have performed, and for a few investment ideas for 2017.
In general, small caps had a good year in 2016, with the FTSE AIM All Share gaining an impressive 14.2%. The FTSE Small Cap Index was slightly behind but still put in a decent gain of 11% and reached an all-time high.
However, their larger blue-chip cousins outperformed over the year, with the FTSE 100 up by 14.4% to a record high as mining stocks recovered and a weakened pound boosted the value of the internationally heavy index.
In contrast, the mid-cap FTSE 250 only gained 3.7% over 2016, but again managed to reach an all-time high in October as the UK focussed index recovered from a slump caused by the aftermath of the EU referendum result.
So 2016 a good year on the whole for small cap investors, and further analysis of the numbers highlights several interesting points….
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