Australian Listed Small Companies

Australian listed small companies are a subset of Australian shares. As at 31st January 2018, there are 198 listed small companies on the Australian share market and generally have a market capitalisation of between $135,160,00 and $5,230,000,000.

What are the benefits of investing in Australian Listed Small Companies?

1. Small Companies are less well covered and researched by investment specialists.

This introduces greater market inefficiencies in the small companies pricing. Therefore, considerable and thorough research of this sector can offer the possibility of higher potential returns.

2. Smaller companies can move quickly

Smaller companies are often run by a smaller executive team and they can move quickly and take advantage of changing market conditions compared to larger companies.

3. Lower trade liquidity

Smaller cap stocks may have lower trading liquidity, and this can sometimes drive up the price further than in the case of a more liquid stocks.

4. Strong after-tax returns

Over the long term Australian small companies have provided strong after-tax returns.

5. Smoother returns in different market cycles

Investments in Australian small companies can diversify the portfolio through correlation benefits with other investments such as fixed interest and this may lead to smoother returns in different market cycles.

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