The sector was subject to a great boom soon after these funds were started in 1997-1998. It wasn’t unusual for these funds to give 100% returns as there was a steady supply of small caps which investors were eagerly snapping up.

Then came the August 1998 crash. There have been signs of life since then but for the most part the small and mid cap sector has underperformed the general equity sector. With just R4.4bn under management, the sector accounts for little more than 1% of equity funds under management...

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