From fallen angels to fading momentum, there are shares in the small to mid cap Australian stockmarket that investors should avoid. But how do you skip the pitfalls that come with investing in the sector?

James Abela, portfolio manager at Fidelity Future Leaders Fund, said that investing is just as much about managing your temperament, ego and enthusiasm as it is measuring the underlying stock's risk and return. And in a world where short-termism is rife, the longevity of a company relies heavily on prudent management.

Does the company manage its business well? Does it have integrity? "Once a company has that, the duration of [the share's] success is much longer," he said.

Abela and the team at Fidelity has successfully identified many of these small to mid-cap companies over the years, with the Future Leaders Fund averaging an above-benchmark annual return of 14.53%  since 2013. Read to find out more.