UK Market Barometer: April 2021

Morningstar's UK Market Barometer shows how stocks fared last month, with smaller cap growth companies making a comeback

James Gard 5 May, 2021 | 1:15PM
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April was a positive month for global equities, with low volatility and rising commodity prices supporting a broad range of stocks, particularly those most sensitive to economic recovery. In terms of UK stocks, all styles (value, growth, blend) and sizes were in positive territory last month, according to the latest Morningstar Market Barometer. Small cap growth stocks led the charge in April, rising 7.6%, while large cap value lagged. In the year so far, mid-cap value is the best performing style with a gain of nearly 17%.

The Morningstar UK Index, which covers more than 300 stocks with a market cap ranging in size from a few hundred million pounds to around £100 billion, gained 3% in March and is up more than 9% in 2021 so far – compared with a loss of 11% in 2020. 

Morningstar UK Barometer for April and 2021

Looking in detail at the stocks that make up the small-cap growth part of the index, there’s a wide dispersion of gains among 31 names. Australian gold and copper producer SolGold (SOLG) is out in front with a solid monthly performance of 32% as precious metals surge, while asset manager Impax (IPX) is not far behind with a gain of just under 30% for the month. Year to date, Impax is up over 26% as it rides the boom in environmental investing. The biggest faller among the small caps in April was white goods company AO World (AO.) with a drop of over 5%. Still, the company was one of the big listed lockdown winners, with a share price gain of nearly 250% since last May. This rise in value has pushed the company to a market capitalisation over £1 billion, which makes it one of the largest small-cap growth stocks in the Morningstar index.

Large-cap growth stocks were the second best performing group in April, led by medical device company Smith & Nephew (SN.), which gained 15%. (The company is also part of’s list of high-yielding dividends.) Ladbrokes owner Entain (ENT) also rose in April, by 11%, making the 2021 increase nearly 50% as online gambling booms during UK lockdown.

Thinking in terms of the year to date figures, it’s clear that value stocks have the upper hand so far. We’ve recently covered value investing in detail – including an explainer, a look at whether Apple is now a growth or value stock, and an interview with the manager of Temple Bar investment trust, who thinks the value rally has further to run.

Stock and Fund Performance are Closely Related

The outperformance of UK small-cap stocks is reflected in gains for funds that invest in then. In Morningstar’s latest round-up of top and bottom funds, two UK smaller companies funds make it into the top 10, Gold-rated ASI UK Smaller Companies with a gain of 8.5%, and Silver-rated BlackRock UK Smaller Companies, which rose 8% in April. While the UK is generally seen as a large-cap value market, with the FTSE 100 dominated by oil companies and banks, it’s been smaller and medium-sized companies that have been setting the pace in April.

Last year saw extreme volatility in stock markets and outperformance of growth as a style – so it's worth looking again at our Barometer for 2020 showed that small-cap value stocks fell 22% while small-cap growth companies gained nearly 40%, a difference of around 62 percentage points. At this stage of 2021, mid cap value is the best performing style with an increase of 16.6%, while small cap growth is the laggard with a gain of just 4% this year.

Morningstar UK Barometer for 2020


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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James Gard

James Gard  is senior editor for


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