In tennis, just as in investing, it's the points that you win that matter. After all, Roger Federer played 1,526 singles matches throughout his career, and while he only won 54% of the individual points within those matches, he walked away with the win 80% of the time.

Ausbil Investment Management's fresh-faced co-head of emerging companies, and portfolio manager for its small and micro-cap strategies, Arden Jennings, is focusing on just that.

"Stocks are just points. But it's the points that matter that win you the game. So for us, our largest detractor was still smaller than our 17th biggest winner. Even though we had an even spread of winners and losers, it was the ones that were successful that made it a good year," he says.

And a good year it was. The Ausbil MicroCap Fund returned 33.53% in FY24, while its Australian Small Cap Fund delivered investors a nice 25.73%. Since inception, these funds have returned 20.08% (since February 2010) and 24.17% (since April 2020), respectively.

So, where is the Roger Federer of Australian small caps seeing the most opportunity today? You'll find out in this episode of The Rules of Investing.

Note: This episode was recorded on 30 July 2024. You can watch the video or listen to the podcast below. 

https://www.livewiremarkets.com/wires/where-the-roger-federer-of-australian-small-caps-sees-the-most-opportunity-today

Timecodes:

• 0:00 - Intro


• 2:36 - Decisions that lead to outperformance in FY24


• 5:04 - Roger Federer's streak and lessons for investing


• 6:13 - Interest rate expectations


• 7:00 - Why the small-cap rebound can continue and the Great Rotation in Australia


• 8:03 - The stocks that will benefit - HUB24 (ASX: HUB), Zip Co (ASX: Z1P), Credit Corp (ASX: CCP)


• 9:24 - Wildcards that could impact investors' portfolios


• 11:41 - What to expect this reporting season


• 12:29 - Why investors should be wary of crowded trades


• 13:24 - A stock to watch this reporting season: Aussie Broadband (ASX: ABB)


• 14:15 - One thing the market is getting wrong right now


• 16:24 - A story of a big win or loss from Arden's investing journey


• 17:27 - Stories from childhood - investing at 10 years old


• 18:01 - One stock to hold if the market were to close for the next 5 years... you'll have to listen to the interview for that one!