When it comes to picking small caps, Australian investors are spoiled for choice with around 2,000 small caps listed on the ASX. Gary Rollo, Portfolio Manager of the Montgomery Small Companies Fund uses three main categories being growth, cyclical and ‘stable compounders’ to narrow down the universe of potential investments.

“The opportunities are many and varied in small caps so we have the flexibility and ability to invest in opportunities as we see them to produce the best risk-adjusted returns.”

For Rollo there are realistically around 400 small caps that meets his investment criteria. Out of those, he whittles the candidates down to the 30 to 50 small-cap stocks the fund has on its books at any one time. 

In this video Gary talks in detail about his process for identifying structural growth stocks for the portfolio that can grow independent to the market cycle. He shares the thesis on a company that he thinks the market has mispriced. 

Now Open: The Montgomery Small Companies Fund

The Montgomery Small Companies Fund invests in 30 to 50 high quality, undervalued, Australian and NZ small and emerging companies with strong growth potential. 

Visit the fund website for more information or send an enquiry using the ‘contact’ button below.

Lucille Voullaire

Thank you. I am interested in small caps including NextDC.

Richard Scott

I think the CEO is paid to much for his services

Gary Rollo

Thanks for your interest Lucille, NXT has long term assets aligned to some large global themes and should be a stock well worth following.

Gary Rollo

Thanks for your comment Richard. CEO & team have created a heap of equity value to date, perhaps when viewed against value created the costs are more reasonable?