Pengana: 3 reasons to invest in small caps

Steve Black, Portfolio Manager at the Pengana Emerging Companies Fund says “It’s always a good time to invest in small-caps” because that’s where you can find tomorrows leaders, generate significant alpha and actually diversify your portfolio. “The broader ASX200 is not a very well represented or diversified list of companies at all. Of the top 200 companies 30% of those stocks by market capitalisation are banks.” Of the top 10 stocks in the ASX200, they represent 50% of the market cap. If investors are looking for a broad diversification across both stock numbers and industry, they’re not getting it just by investing in the ASX200.” In this video Black discusses two stocks with great promise, they he’s recently added to the portfolio.