What makes a small company small in the eyes of your average fund manager? What are the criteria used in deciding when a company is too small to be bothered with in the new super-duper sectoral investment strategy that the single currency has introduced?

A few fund managers in the Irish market feel that below £500 million (€635 million) is small and that less than £100 million is too small to be bothered with. But Merrill Lynch adopts a policy that puts virtually every Irish company in that category with the exception of the top 10 stocks.

In its first pan-European review of the small and mid-cap sector, Merrill states: "We firmly believe that whilst the standard definition of smaller companies in the UK [and presumably Ireland] includes a multitude of companies with a market capitalisation less than $600 million (€438 million), the maximum market threshold is rising and `small' smaller companies are increasingly being ignored. Because of this our limit for the Merrill Lynch Mid/Small Cap Monitor is $1.25 billion.

Amazingly, the only small/mid cap Irish companies that Merrill even bothers with in its first review of 350 European companies are Anglo Irish Bank (accumulate), Boxmore (reduce) - hardly a surprise there, and Green Property (accumulate).

Merrill does not go into any detail on how these three stocks were chosen out of the 90-odd "small" companies on the Irish market, but one would hope that future issues of their pan-European monitor might adopt a broader approach.