A focus on small and mid caps lets the managers at Henderson deliver above-average returns regardless of how the wider economy is doing

ECONOMIC OUTLOOK IS MIXED . Data released at the end of August painted a picture of resilience from the UK consumer , while the dreary talk of stalled business investment in the post-Brexit aftermath has been somewhat silenced by recent releases of both services and manufacturing PMIs – surveys of confidence in respective sectors – which showed a sharp rebound from July ’ s shocks .

On one hand it may be too early to rule out a recession , but on the other if Britain ’ s economy shrugs off the Brexit result and performs even stronger , rising interest rates may serve to zap the currency , at the exporter ’ s dismay . Either way , GDP growth seems likely to remain lacklustre at best .

In our portfolios , we utilise a blend of growth and value styles . Known as growth-at-the-right-price ( GARP ), we seek out companies we believe demonstrate higher-thanaverage levels of growth , be it in revenues , earnings , and so forth , but aim not to overpay for that growth – i . e . finding companies where the market appears to be undervaluing their fundamental worth .

Importantly , we look for companies with structural growth drivers , where long-term underlying trends – for example changing demographics , overarching governmental policies , or technological innovations – drive revenues and enable businesses to grow regardless of what is going on in the wider economy . It seems a particularly logical investment strategy in an environment of persistently low growth .

Small and mid-size companies – where we focus our attention – serve to further enhance exposure to the underlying structural growth trends . Their inherently small , nimble , ambitious management teams , unencumbered by red tape or

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