Companies that fall outside of the JSE’s 40 biggest firms, referred to as small-and mid-cap stocks, are among the cheapest in the world, but investors are largely ignoring them despite prospects for juicy returns, says Keith McLachlan, a fund manager at AlphaWealth. SA’s small-cap sector was trading at almost the same lows experienced during the global financial crisis, McLachlan, a small-cap specialist, told Business Day on Wednesday. He has benchmarked the JSE’s small-and mid-cap indices against similar indices worldwide, finding they rank consistently near the bottom of the pile when measuring the price of the index against the value of its profit, assets and revenue. Only Italy’s small-caps were cheaper, but SA’s fundamentals were better, he said. As the economic outlook improved, companies in this sector were likely to generate a good return. SA’s equity sector is dominated by giant companies, with Naspers, Richemont and BHP making up nearly 40% of the JSE’s Top 40 index. Compa...

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