Established small and microcap portfolio managers Marcus Burns and Matthew Booker believe a focus on cash flow separates certain investments from what would otherwise be momentum bets.

They said cash flow is particularly important when investing in small companies because it helps control risk in a market segment which is potentially more volatile.

In the accompanying article, Burns and Booker explain how the new Spheria Emerging Companies LIC put together a portfolio with stocks that generate solid cash flow, are well managed and deliver good returns