Small and mid-cap stocks with big potential

Professional investor Guy Anderson of the Mercantile Investment Trust selects three small and medium-sized firms with promising prospects that the market has missed.

Each week, a professional investor tells us where he'd put his money. This week: Guy Anderson of the Mercantile Investment Trust selects three small and medium-sized firms with promising prospects that the market has missed.

Despite the significant political uncertainty that we saw in the UK over the past year, small and medium-sized companies based in the country outperformed their larger counterparts. This was not, however, an anomaly. In fact, over the past 60 years, UK small- and mid-caps have outperformed in roughly two out of every three years. What's more, this phenomenon is mirrored in other markets around the world.

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Guy Anderson is manager of the Mercantile Investment Trust