Global Matters Weekly – 5 December 2022

A turning point for UK mid-caps

by Mark Wright, CFA — Portfolio Manager

— Fearful investors heading for the exit have crushed valuations this year by driving down share prices.

So far, the year 2022 has been one that investors in UK mid-capitalisations (mid-caps) would probably prefer to forget. The first six months of this year witnessed the worst relative performance of UK mid-caps vs UK large capitalisations (caps) on a rolling six-month basis since 1986 (as far back as I could find data). By 30th June, they had underperformed UK large caps by a staggering 18%. The performance gap has since widened a little to over 19% on a year-to-date basis. The absolute performance of UK mid-caps is not as stomach churning, but at -15% it is still poor.

Market Snapshot

    • Global equities returned 1.1% last week
    • Most World indices saw positive returns
    • Brent crude rose 2.3% to $85.57 per barrel
    • Gold rose 2.4% to $1797.63 per ounce