The small cap funds have just R6.3bn under management — little more than 1% of the assets held by domestic equity funds. It’s quite a contrast to the heady days of 1998, when it looked as if these funds were destined to overtake general equity funds.

Yet small cap funds are now much more reliable than in those days. They no longer focus on faddish IT businesses in which the largest item on the balance sheet was goodwill. They provide a blend of industrial, resources and financial shares, including such well-managed businesses as AVI, Santam and Italtile...

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