Reacting to current market conditions

There is no doubt that recent global events have thrown a spanner into the works for many investors. For a while now, I have been pointing out the value disparity between the larger companies and the smaller ones in the UK:

Almost all international funds from asset allocators have flowed into FTSE 100 companies (roughly the first decile). The UK has looked cheap compared to other developed markets, particularly the US, which has led to positive fund flows into the largest UK stocks. In contrast, smaller companies are much more at the mercy of UK-based individual investors, either through their direct equity exposure or through small and microcap funds. Here, confidence has been weak for several years, leading to the smallest stocks trading at less than half the EV/EBITDA multiple of the largest (on average).
It is worth noting that, as long as investors focus on profitable stocks (the smaller-company tail has a higher proportion of more speculative stocks), I can find no difference in quality or outlook between the largest and smallest companies. In fact, small companies appear to retain the stronger growth prospects that typically accompany their nimbler approach, which is usually rewarded with a higher...