UK's small and mid-cap shares stand to lose in Brexit

London

THE risk of Britain's isolation from the European Union (EU) is threatening what has been a winning trade for the country's stocks since the financial crisis: buy small.

Buoyed by their limited exposure to slowing emerging-market growth, a rout in commodities and a banking crisis, the UK's small and mid-cap shares outperformed their bigger peers in all but one of the years since 2008 and surged more than three times as much from a low that year through 2015. That trend has started to reverse.