2 ASX small caps standing out amid the rally

In August, Australian small-caps delivered an impressive 8.8% gain versus the ASX 200’s 3.6%, taking the 3-month outperformance to 12.1% vs. 6.6%.

In this Livewire Markets interview, James Barker, Co-Portfolio Manager of the Ellerston Australian Micro Cap Fund and Ellerston Australian Emerging Leaders Fund , unpacks the risks and opportunities, shares their most recent small-cap investment, highlights new additions to the watchlist, and explains positions trimmed post-reporting season.

For August 2025, the Ellerston Australian Micro Cap Fund returned 11.1% and an impressive 34.4% over the past year*. The Ellerston Australian Emerging Leaders Fund returned 7.2% for August and 33.5% over the past year. These returns are net of fees with both funds delivering outperformance over the long term ahead of the Small Ordinaries Accumulation Index.

*As at 31 August 2025