Finding value amongst small-cap LICs

Peter Rae

Small-cap shares have underperformed the broader market over the past 12 months and, on some metrics, the sector appears reasonable value. However, investing in small-caps can be a riskier proposition and in recent weeks a number of small-cap company share prices have been hit hard by revenue and earnings downgrades. This points to the importance of strong research and a well-diversified portfolio. Listed investment companies provide an opportunity for investors to build a well-diversified, professionally managed portfolio of small-caps, although many of the small-cap LICs are trading at significant premiums to pre-tax NTA. In its latest monthly LMI Update Independent Investment Research looks at an alternative option for small-cap investors. We profile a LIC that invests in a portfolio of both small and mid-cap stocks and also offers investors an above market yield. Read the report for full details.


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Graeme Holbeach

I notice all the LICs listed in the Report have either some degree of Recommended, Rating Under Review or Not Rated. Does Not Rated mean they haven't been assessed or is it a polite way of saying Not Recommended / Avoid / Sell?

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