Norwich Union believes that the outlook for large cap stocks is improving.
Norwich Union believes that the outlook for large cap stocks is improving.
Gerard Lane, Norwich Union investment strategist, believes that large cap stocks could soon start outperforming small cap stocks.
He said: “The tide could soon start turning in favour of large caps. Large cap yields are now about 0.5% higher than mid-caps and when this has happened in the past, large caps have outperformed smaller to mid-cap shares.
“In 1999 mid-cap yields were about 0.75% better than large caps, which is one of the reasons why small caps have done so well over the past few years. The FTSE 250 has enjoyed tremendous returns over the past five years and the index hit an all-time high at the end of September*.
“However, the FTSE 250 has a price earnings ratio of 12.2 based on 2006 forecasts, which is expensive to the average price earnings ratio of 11.6 in the FTSE 100.”
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*FTSE 250 reached 7936 on 30 September 2005
Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563
Cheryl Cox 01904 452617 Out of hours 07800 695275
Notes to editors:
- Norwich Union is one of the UK's biggest insurers. It is a leading provider of life and pensions products and one of the largest Financial Adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
- Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.