Investing into active UK equity managers has sometimes been considered synonymous with investing into UK small caps , and it is clear why that is the case .

In part one , we looked at factors in assessing UK equity manager performance from a ‘ macro ’ perspective . Now let ’ s focus on the ‘ micro ’.

Over the long term , we observe that the average UK equity manager exhibits a bias towards size ( i . e . investing in smaller companies ). The bias towards size has been persistent through time , with other factors changing . The chart below illustrates this trend clearly , with nearly 100 % of the manager universe exhibiting a bias towards size , and increasingly more than 75 % of the universe also offering a bias towards quality . Note that the sums of each factor don ’ t add up to 100 %, indicating that investing with active managers offers exposure to more than just a single factor .

These stats offer an interesting and different perspective to the types of UK equity managers available in the marketplace . For instance , of the over 200 managers in the IA UK All Companies

Sector , less than 5 % of the funds describe themselves as specialised value managers , while certainly not all managers would call themselves small-cap managers , even though most of them consistently express a small-cap bias over time .

Source : SciBeta , Bloomberg , Morningstar , LGIM , as at August 2024 .

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