Such has been the recent bounce in UK equities that even small caps, the most unloved of sectors, is distinctly in the green for 2024 so far.

The allocators we monitor however are not yet proving themselves dedicated followers of fashion, with the average allocation to UK small cap funds being 85 basis points, compared with 2.2 per cent in August.

It has to be said with this data set, most of the allocators we cover don’t have any dedicated allocation to UK small cap funds - though of course they may have exposure through all cap funds - so a move by one holder can distort the average.

Indeed the 2.2 per cent allocation last year was heavily influenced by Downing having 5 per cent there, and while that allocation remains intact the biggest of the hitters in the space, including Tatton and Investec, have no dedicated small-cap allocation.

One DFM who has been finding opportunities among the UK small caps is Walker Cripps. 

Walker Crips's Alan Kinnaird says that while it is hard to identify what may be the catalyst to make UK large cap equities close the performance gap with the US, he has a theory about why small caps could enjoy a period on the sunny side of the street. 

He says the average premium at which small caps get taken over has historically been 30 per cent, but since 2021 this control premium has moved to 51 per cent.

In Kinnaird's view that justifies UK small caps trading at higher valuations in future, and could be a catalyst for renewed interest in the sector.