Anticipating a UK small-cap super cycle

The Diverse Income Trust’s (DIVI’s) managers, Gervais Williams and Martin Turner at Premier Miton Investors, are currently remarkably upbeat. Usually, when market leadership becomes too concentrated, like now in US large-cap technology stocks, investor preferences shift towards another group of companies. The managers believe that equity income stocks are set to become the new market favourites as, in a nationalistic world when asset prices are volatile, a steady stream of cash paid directly into investors’ bank accounts becomes a major advantage. They expect this trend to particularly favour the UK stock market as it has a large cohort of equity income stocks and has been devalued by persistent outflows since Brexit. Williams and Turner...