Australian Small & Mid Cap Equity Funds are investment funds focused on stocks of smaller companies listed on the Australian Stock Exchange.
This segment of the equity market offers investors opportunities for capital growth, often with higher potential returns than larger cap stocks, while also coming with distinct risks.
Australian Small & Mid Cap Equity Funds primarily invest in companies with smaller market capitalizations—typically classified as those with a market capitalization under $3 billion (small cap) and between $3 billion and $10 billion (mid cap).
These funds aim to capture the upside potential of smaller companies that may not be as widely followed as large caps, often leading to opportunities for higher growth.
There are two main types of Australian Small & Mid Cap Equity Funds:
There are two main features of Australian Small & Mid Cap Equity Funds:
There are three main risks of investing in Australian Small & Mid Cap Equity Funds:
When comparing these funds, investors should consider the following factors:
Investors can gain exposure to Australian Small & Mid Cap Equity Funds through:
A small-cap stock typically has a market capitalisation of under $3 billion.
A mid-cap stock generally falls between $3 billion and $10 billion in market capitalisation.
Small & Mid Cap Equity Funds are generally better suited to risk-tolerant investors looking for higher growth asset classes.
Capital gains generation can lead to tax liabilities and income tax is payable on fund distributions, varying by individual circumstances.
Investors can generally redeem their units by following the fund's specific withdrawal process which can take time.
Yes, due to market volatility and fund performance risks.
It is advisable to assess your portfolio at least annually, or more frequently if market conditions change.
This varies by fund. Some funds may have minimum initial investments ranging from $1,000 to $5,000.
Australian Small & Mid Cap Equity Funds represent a distinctive investment opportunity with the potential for significant capital growth. This asset class presents both unique benefits and risks.
By understanding the types of Australian Small & Mid Cap Equity Funds available and how to evaluate them, investors can make informed decisions that align their portfolios with their risk tolerance and investment objectives.
The Fund aims to provide a total return (both income and capital growth), after fees and costs, that exceeds the S&P/ASX Emerging Companies Accumulation Index over the medium to long term (For Wholesale Investors Only).
The Portfolio provides investors diversity by investing in a range of small and medium sized stocks listed on the ASX.
