The best ETFs for USA Small Cap Stocks

How do I invest in USA Small Cap stocks?

It is well known that companies with smaller market capitalizations generate higher returns over the long term. However, they also come with higher risks that investors should efficiently manage. Diversification of investments with ETFs is the safest bet for an independent investor to approach the small cap stocks.

There are essentially three indices available to invest with ETFs in USA small cap companies. This Investment Guide for USA small cap stocks will help you navigate between the peculiarities of the Russell 2000®, MSCI USA Small Cap, S&P SmallCap 600 and the ETFs tracking them. It will allow you to find the most suitable small cap USA ETFs for you by ranking them according to your preferences.

0.30% p.a. - 0.43% p.a.
annual total expense ratio (TER) of USA small cap ETFs
on USA small cap stocks, which are tracked by ETFs
on USA small cap stocks
The best indices for USA small cap ETFs

The best USA Small Cap ETF by 1-year fund return as of 29/02/20

All USA small cap ETFs ranked by fund return

 

The largest USA Small Cap ETF by fund size in CHF

All USA small cap ETFs ranked by fund size

 

The cheapest USA Small Cap ETF by total expense ratio

All USA small cap ETFs ranked by total expense ratio

 
 

Indices on USA Small Cap Stocks compared

Methodologies of the most important indices

MSCI USA Small Cap Russell 2000® S&P SmallCap 600
Number of ETFs 1 ETF 4 ETFs 2 ETFs
Number of constituents 1,755
(28/02/20)
2,000 600
Investment universe MSCI USA Investable Market Index: appr. 2,400 US companies Russell 3000® index: 3,000 US companies S&P 1500® Composite index: appr. 1,500 US companies
Index rebalancing Quarterly Annually Quarterly
Selection criteria The smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI USA Investable Market Index Appr. 2,000 of the smallest firms from the Russell 3000® index (ranked by total market cap) The 600 smallest companies from the S&P 1500® Composite index
Index weighting Market cap
(free float)
Market cap
(free float)
Market cap
(free float)

Source: justETF Research; As of 31/01/2020

 

MSCI USA Small Cap index

The MSCI USA Small Cap index measures the performance of the small cap segment of the US market. The index represents the smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI USA Investable Market Index. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the MSCI USA Small Cap Factsheet Methodology

  • 1,755 (as of 28/02/20) small cap stocks from the United States
  • Index rebalancing takes place quarterly
  • Index has minimum size, free float, liquidity and length of trading criteria
  • Stock selection is based on free float market cap
  • Selection criteria: smallest companies of the MSCI USA Investable Market Index
  • Index weighted by free float market capitalization
 

Russell 2000® index

The Russell 2000® index tracks appr. 2,000 of the smallest companies (as measured by total market cap) from the underlying Russell 3000® index, which consists of the largest 3,000 US companies. The Russell 2000® index represents appr. 10 percent of the total market capitalization of the Russell 3000® index. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the Russell 2000® Factsheet Methodology

  • Appr. 2000 small cap stocks from the United States
  • Index rebalancing takes place annually. Exception: additions due to new IPOs, which take place quarterly
  • Underlying index has requirements for inclusion such as minimum market cap, closing price, free float, location of trading of the majority of a company's shares
  • Stock selection is based on total market cap
  • Selection criteria: appr. 2,000 smallest stocks from the Russell 3000® index are included
  • Index weighted by free float market cap
 

S&P SmallCap 600 index

The S&P SmallCap 600 index includes 600 small cap US stocks from the underlying S&P 1500® Composite index. Companies must have an unadjusted market cap of 600 million to 2.4 billion USD to be included in the index. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the S&P SmallCap 600 Factsheet Methodology

  • 600 small cap stocks from the United States
  • Index rebalancing takes place quarterly
  • Index has minimum liquidity, free float and financial viability (positive earnings in the last year and quarter) inclusion criteria
  • Selection criteria: 600 smallest companies from the underlying S&P 1500® Composite index with an unadjusted market cap of 600 million to 2.4 billion USD
  • Index weighted by free float market cap
 

USA Small Cap ETFs in comparison

The most important factors at a glance

When choosing a USA small cap ETF one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all USA small cap ETFs with details on size, cost, age, income, domicile and replication method ranked by fund size.

Compare all USA small cap ETFs in detail
Compare all USA small cap ETFs in a chart

Provider
ISIN
  Fund size
in m CHF
TER
in %
Use of profits Fund domicile Replication method
iShares S&P SmallCap 600 UCITS ETFIE00B2QWCY14 485 0.40% p.a. Distributing Ireland Optimized sampling
Xtrackers Russell 2000 UCITS ETF 1CIE00BJZ2DD79 437 0.30% p.a. Accumulating Ireland Full replication
SPDR Russell 2000 US Small Cap UCITS ETFIE00BJ38QD84 369 0.30% p.a. Accumulating Ireland Optimized sampling
iShares MSCI USA Small Cap UCITS ETF (Acc)IE00B3VWM098 364 0.43% p.a. Accumulating Ireland Optimized sampling
Amundi Russell 2000 UCITS ETF EUR (C)LU1681038672 59 0.35% p.a. Accumulating Luxembourg Unfunded swap
ComStage S&P SmallCap 600 UCITS ETFLU0392496005 49 0.35% p.a. Distributing Luxembourg Unfunded swap
Amundi ETF Russell 2000 UCITS ETF USDLU1681038839 18 0.35% p.a. Accumulating Luxembourg Unfunded swap

Source: justETF.com; As of 31/03/20

 

Return comparison of all Small Cap ETFs on US equities

The table shows the returns of all USA small cap ETFs in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.

ETF   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
iShares MSCI USA Small Cap UCITS ETF (Acc) -11.35% -12.07% -3.62% -6.47% 8.81%
Amundi ETF Russell 2000 UCITS ETF USD -11.15% -12.04% -2.42% -7.78% 5.71%
Xtrackers Russell 2000 UCITS ETF 1C -11.16% -12.07% -2.51% -7.89% 5.06%
SPDR Russell 2000 US Small Cap UCITS ETF -11.22% -12.17% -2.61% -7.94% 5.07%
Amundi Russell 2000 UCITS ETF EUR (C) -11.24% -11.74% -2.54% -8.08% 5.92%
ComStage S&P SmallCap 600 UCITS ETF -12.56% -13.76% -4.74% -10.38% 4.03%
iShares S&P SmallCap 600 UCITS ETF -12.62% -13.88% -4.95% -10.71% 3.23%
ETF   2020
in %
2019
in %
2018
in %
2017
in %
2016
in %
Amundi ETF Russell 2000 UCITS ETF USD -11.33% 22.73% -10.52% 9.51% 23.50%
iShares MSCI USA Small Cap UCITS ETF (Acc) -11.73% 24.25% -9.71% 11.56% 21.94%
Xtrackers Russell 2000 UCITS ETF 1C -11.95% 24.03% -12.70% 10.35% 23.29%
Amundi Russell 2000 UCITS ETF EUR (C) -11.97% 22.63% -10.26% 9.45% 23.15%
SPDR Russell 2000 US Small Cap UCITS ETF -12.01% 22.71% -10.59% 9.18% 23.84%
ComStage S&P SmallCap 600 UCITS ETF -13.46% 21.53% -9.07% 10.98% 21.16%
iShares S&P SmallCap 600 UCITS ETF -13.67% 19.78% -8.17% 7.89% 28.88%

Source: justETF.com; As of 29/02/20; Calculations in CHF including dividends