What are small companies?
The definition of what constitutes a “small company” differs within the industry, but in general terms, they are companies with a market value between $300 million and $2 billion.
Why invest in small companies?
Small caps offer an interesting opportunity in the market due to the lack of analyst coverage, subsequent potential for mispricing and long-term growth prospects.
What is the Intelligent Investor Australian Small Companies Fund?
Using Intelligent Investor’s value-based investing philosophy, the Australian Small Companies Fund is a managed fund that seeks to deliver moderate to high total portfolio returns over the long term across 10-25 listed small companies, often overlooked by the broader market. These are companies smaller than the largest in the Small Ordinaries Index (curr A2 Milk, worth $3.2B).
The ‘Small Ords’ are the smallest 300 companies in the All Ords index (e.g. company 201-500).
The fund is managed by our equities team at Intelligent Investor, and will use the same long-term, value investing philosophy that has provided the team's track performance to date.
The main benefits of the Intelligent Investor Australian Small Companies Fund include:
- Good potential for generating capital growth
- Lower fee structure than most fund managers
- Benefit from a unique opportunity - less liquidity means larger funds struggle to invest in small companies.
- Good potential for above average returns from active management by the experience team at Intelligent Investor
- Limited contributions to ensure that performance is not impacted by the size of the fund, and to maximise the possibility of delivering a better return.
More information on investing in small companies: