LIC myth, page-2

there is a place for both ETFs and LICs in a portfolio so why not use both ?
4 months is way too short a timeframe in which to compare a fund manager's performance relative to the index.
WMI was outperforming the smalls index up until the past few months, and rose by a massive 40% in it's first 6 months
after listing in July 2017 ( seeing as you pay attention to short term ).
there are times in the market when holding some cash and waiting for opportunities is sensible.  WMI could have the last
laugh holding 40% cash if the market tanks again so don't jinx yourself there.....
Small caps is an area where Australian fund managers often have a strong record of outperforming the index ,
although as you point out not necessarily over short term periods.
for instance I have a large holding in Smallco Investment fund ( unlisted, and closed to new investors ) which
over the past 10 years as of Jan 31 has returned 21.6% p.a after all fees,  and 13.8% p.a. since inception in 2000.   
compare that with the pathetic performance of the Aussie small cap index ( XSO ) which is still 35% below the highs of 2008
and is at the same level ( 2674 ) as it was way back in 2005.
the listed LICs  WAM and WAX have also underperformed the index lately but over the past 5 and 10 year periods
have delivered returns far higher than the small caps index. 
OPH  ( Ophir high conviction fund ) is a listed small caps fund that has outperformed the XSO since it listed in Dec
( up by about 18% ) and has massively outperformed the XSO as an unlisted entity over the preceding few years.
http://www.ophiram.com.au/files/Ophir%20High%20Conviction%20Fund%20(OPH)%20-%20DEC18.pdf

I would never buy the Aussie small cap ETF as an investment,  but yes you could trade it shorter term.  
there are a lot of rubbish small cap companies, particularly small mining companies,
which is why fund managers have a much better chance of outperforming than they do with large caps funds.
My suggestion would be ETFs for trading,  and LICs or LITs for longer term periods.
Each to their own.