If your risk profile allows for it, I think having a little exposure to the small side of the market can do wonders for a portfolio.
After all, the potential returns on offer at this side of the market are significant. Though, it is worth remembering that not all small cap shares were born equal and some will fail to live up to their potential.
Three small cap ASX shares which I believe can live up to their enormous potential are listed below. Here's why I think they are good options for small cap investors:
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a provider of enterprise mobility software. This software allows sales and service organisations to increase their sales win rates, reduce costs, and improve customer satisfaction through improved mobile worker productivity. Last year it added to its blue chip customer base through agreements with sports giant Nike and global beauty retailer Sephora. I feel this is a testament to the quality of its product and bodes well for its performance in FY 2020 and beyond.
Serko Ltd (ASX: SKO)
Serko is a technology company focused on developing innovative solutions to address the challenges of corporate travel and expense management. The company is a market leader in its category and has over 6,000 corporations and travel management companies using its platform. At the last count, over US$4.5 billion of transactions were going through Serko's platforms on an annual basis. I believe the growing popularity of its platform has put Serko in a position to generate strong revenue growth again in FY 2020 and beyond.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a provider of software that uses artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. Thanks to the growing popularity of its software with radiologists across North America, it has been growing its recurring revenues at a rapid rate. I expect this positive trend to continue this year, especially given its recent acquisitions.
