Finding value amongst small-cap LICs

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.