How to spot value in small caps

Limit your forecast period to between three and five years and don’t obsess about buying the highest returning stock, says Richard Ivers, portfolio manager of the Prime Value Emerging Opportunities Fund.

“We’re not necessarily looking to buy the business with the highest potential return, but for the business that has a good return with very low risk.”

The fund recently topped Mercer’s Australian Small Companies survey of the best performing funds for the year to 30 June. It returned 18.1% after fees versus negative 5.7% for the Small Ords index over the period. 

Ivers’ team pounced on opportunities during COVID, including buying one of the few reopening trade plays that’s not already priced for the recovery. Watch the following interview for more detail about Prime Value’s stock selection process and the team’s thesis on this overlooked small cap.

More information about Prime Value

The Prime Value Emerging Opportunities Fund has topped Mercer’s Australian Small Companies (ex-ASX100) survey for the year to 30 June 2020. 

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