Don’t judge all small companies by the poor index returns

Investors Mutual

Investors Mutual Limited

When I reflect on the Australian equities industry over a number of cycles, I believe that the small cap sector is still fundamentally misunderstood in terms of investor outcomes. Small caps are normally seen as either an opportunity for phenomenal growth outcomes – a way to add ‘spice’ to more conservative portfolios – or, as prone to absolute carnage and wealth destruction. It is uncommon for investors to see smalls as part of a sustainable long term strategy, for apparent good reasons… The small cap index has been basically flat over the last three years, during which time the broader ASX300 has gained over 9% per annum. Looking back further, over the last 10 years (as at 30 September 2015) the Small Ords Accumulation Index has delivered investors close to a zero return. It is no surprise then that investors push back when advisors recommend an allocation to small caps. What explains this underperformance of the small cap index? Read the full article (VIEW LINK)


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Investors Mutual
Fund Manager
Investors Mutual Limited

Investors Mutual Limited (IML) is a specialist Australian equities fund manager and was established in May 1998 by Anton Tagliaferro. Based in Sydney, the IML team applies a conservative value-based investment style with a long-term focus.

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