Perritt's Michael Corbett on micro-cap inefficiencies and opportunities

Laura Lallos at Morningstar interviews Portfolio Manager Michael Corbett about the inefficiencies and opportunities in micro-caps.

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Opinions expressed are those of the author and are subject to change, are not guaranteed and are not intended to be a forecast or as a recommendation to buy or sell any security.

Turnover represents the percentage of a portfolio that is sold in a particular month or year. The Perritt MicroCap Opportunities (PRCGX) turnover ratio was 7.3% for the six months ended April 30, 2017.

The Perritt Ultra MicroCap Fund (PREOX) seeks long-term capital appreciation. Liquid Private Equity Alternative investments (LPEA) are alternative investments such as hedge funds or private equity funds that are available to any investor. The gross expense ratio for PREOX is 1.78%.  Some LPEAs do not charge performance fees. A common fee structure for a hedge fund is known as two and twenty. This means there is a two percent management fee for the fund and 20 percent of the profits once a particular pre-determined level of performance is achieved. Mutual funds offer daily liquidity.  Daily liquidity and increased transparency, however, does not mean that the complexity and sophistication synonymous with hedge fund strategies are irrelevant when investing in liquid alts. Investing involves risk.  PREOX reports daily volatility while LPEAs typically only reports principal value several times a year. Investing involves tax consequences and transaction expenses that may vary for each individual investor. The information provided is not intended to be tax advice. Consult your tax professional for additional information.

M&A = Mergers & Acquisitions

The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company and may be obtained by calling (800) 331-8936. Read carefully before investing.

Mutual fund investing involves risk. Principal loss is possible. The Funds invest in smaller companies, which involve additional risks such as limited liquidity and greater volatility. The Funds invest in micro cap companies which tend to perform poorly during times of economic stress. The Ultra MicroCap Fund and Low Priced Stock Fund may invest in early stage companies which tend to be more volatile and somewhat more speculative than investments in more established companies. Low Priced stocks are generally more volatile than higher priced securities.

The Perritt Funds are distributed by Quasar Distributors, LLC.

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