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.
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Peter has 35 years’ experience in the banking and finance industry, including 15 years as an equities analyst. Peter was a sector head in the equities research team at Morningstar with a focus on consumer and industrial companies.