RFG makes it to the big time

Retail Food Group's pending inclusion in a key equities index is lending support with the stock gaining ground this morning even as the broader market struggled to gain traction.

Retail Food Group's (RFG) pending inclusion in a key equities index is lending support with the stock gaining ground this morning even as the broader market struggled to gain traction.

The food franchise brand owner jumped 1.4%, or 6 cents, to $4.42 on news that it will be included in the S&P/ASX 200 Index after December 20. The gain stands in contrast to the flat open by the top 200 benchmark.

While experts believe that inclusion in an index only lends marginal buying interest in the stock by passive index fund managers, research has shown that new entrants into a key index tend to outperform over the short to longer-term.

As highlighted in our article Small consumer stocks at Christmas crossroads on October 30, there are reasons to believe Retail Food Group will find favour with the market over the next 12 months.

The group, which owns brands like Donut King, Brumby’s Bakeries and Michel’s Patisserie, is aggressively expanding into the gourmet pizza segment and has recently undertaken a capital raising to fund the expansion.

Retail Food Group is part of the Uncapped 100.