This episode dives into the distortions index funds create in the small cap space and how active investors can exploit inefficiencies. We discuss inclusion effects, IPO flows, capital misallocation, and portfolio mistakes to avoid. In this Australian Investors Podcast episode, your host Owen Rask is joined by Luke Laretive and Ben Richards (Seneca Financial Solutions) to discuss: – The flaws of small cap index investing – How inclusion in ASX indices drives mispricing – Lessons from Catapult, Objective Corp & Sigma – Mistakes small cap investors should avoid If you love learning about small cap investing, subscribe to the Australian Investors Podcast on Apple, Spotify, or YouTube! Follow us on Instagram and TikTok for more investing insights. Topics Covered – How ETFs and index funds distort the small cap landscape – Why active managers can still outperform in small caps – What index inclusion does to share prices (examples from Catapult, EOL, Objective) – Why more companies are gaming the index system (e.g. Sigma, Guzman y Gomez) – Common small cap investing mistakes and how to avoid them Episode Resources Check out ⁠Good Research⁠ https://goodresearch.com.au/ Have a look at all of Seneca's Investment Products https://senecafs.com.au/investment-products/ Read more about ⁠Seneca's Australian Small Companies Fund https://senecafs.com.au/wp-content/uploads/2025/02/Seneca-Australian-Small-Co-Fund-January-2025.pdf ~~ Rask Resources ~~ 🔗 Explore all Rask services – https://bit.ly/R-services 📋 Get Financial Planning – https://bit.ly/R-plan 📈 Start investing with Rask – https://bit.ly/R-invest 📜 Access Show Notes – https://bit.ly/R-notes ❓ Ask a question – just select the Investor Podcast – https://bit.ly/R-quest 📲 Follow us on social media: Instagram: @rask.invest TikTok: @rask.invest DISCLAIMER This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. You should consider if the information is appropriate for your situation before acting on it. If you’re unsure, consult a licensed financial planner. The Rask Group is NOT a qualified tax accountant, financial adviser, or tax professional. You can access The Rask Group’s Financial Services Guide (FSG) here: https://www.rask.com.au/fsg. #Investing #Finance #AustralianInvestorsPodcast