The best ETFs for European Small Cap Stocks

How do I invest in European 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 four indices available to invest with ETFs in European small cap companies. This Investment Guide for European small cap stocks will help you navigate between the peculiarities of the EURO STOXX® Small, MSCI EMU Small Cap, MSCI Europe Small Cap, STOXX® Europe Small 200 and ETFs tracking them. It will allow you to find the most suitable European small cap ETFs for you by ranking them according to your preferences.

0.20% p.a. - 0.58% p.a.
annual total expense ratio (TER) of European small cap ETFs
on European small cap stocks, which is tracked by ETFs
on European small cap stocks
The best indices for European small cap ETFs

The best European Small Cap ETF by 1-year fund return as of 30/11/16

All European small cap ETFs ranked by fund return

 

The largest European Small Cap ETF by fund size in EUR

All European small cap ETFs ranked by fund size

 

The cheapest European Small Cap ETF by total expense ratio

All European small cap ETFs ranked by total expense ratio

 
 

Indices on European Small Cap Stocks compared

Methodologies of the compared indices

EURO STOXX® Small MSCI EMU Small Cap MSCI Europe Small Cap STOXX® Europe Small 200
Number of ETFs 2 ETFs 3 ETFs 3 ETFs 2 ETFs
Number of constituents Appr. 96 464
(31/10/16)
940
(31/10/16)
200
Investment universe EURO STOXX® Small index: appr. 300 companies from Eurozone MSCI EMU Investable Market Index: 684 (30/09/2014) companies from Eurozone MSCI Europe Investable Market Index: 1,350 (30/09/2014) companies from Europe STOXX® Europe Small 200 index: 600 companies from 18 European countries
Index rebalancing Quarterly Quarterly Quarterly Quarterly
Selection criteria Companies in the bottom third of the underlying EURO STOXX® Index Companies ranked by size covering appr. lowest 14% of the free float-adjusted market cap of the MSCI EMU Investable Market Index Companies ranked by size covering appr. lowest 14% of the free float-adjusted market cap of the MSCI Europe Investable Market Index Stocks from STOXX® Europe 600 Index ranked from 401 to 600 by their free float market cap
Index weighting Market cap
(free float)
Market cap
(free float)
Market cap
(free float)
Market cap
(free float)

Source: justETF Research; As of 30/09/2014

 

EURO STOXX® Small Index

The EURO STOXX® Small Index comprises small sized companies from the underlying EURO STOXX®Index. EURO STOXX® Index is a subset of STOXX® Europe 600 Index comprising only the companies from countries in the Eurozone. Small caps are determined as the bottom 33% companies in the underlying index ranked by their market capitalization. The stocks passing the selection screen are weighted in the index by the free float market cap.

 

Methodology of the EURO STOXX® Small Methodology

  • Appr. 96 small cap stocks from Eurozone
  • Stock selection is based on the size of companies – the bottom third of the EURO STOXX® Index are selected
  • Index rebalancing takes place quarterly
  • Index weighted by free float market capitalization
  • Weight per constituent is capped at 20%
 

MSCI EMU Small Cap Index

The MSCI EMU Small Cap Index captures small cap stocks across the 10 developed countries in the Eurozone. The index represents appr. lowest 14% (by free float market cap of companies) of the free float-adjusted market capitalization of the MSCI EMU Investable Market Index. The index is based on free float market capitalization.

 

Methodology of the MSCI EMU Small Cap Factsheet Methodology

  • 464 (31/10/16) small cap stocks from Eurozone
  • Only companies from developed EMU countries
  • Index rebalancing takes place quarterly
  • Investable index has minimum size, free float, liquidity and length of trading criteria
  • Stock selection is based on free float market cap
  • Selection criteria: Companies ranked by size covering appr. lowest 14% of the free float-adjusted market cap of the MSCI EMU Investable Market Index
  • Index weighted by free float market cap
 

MSCI Europe Small Cap Index

The MSCI Europe Small Cap Index includes small cap stocks from 15 developed countries in Europe. The index represents appr. bottom 15% (by free float market cap of companies) of the free float-adjusted market capitalization of the European developed countries. The index is based on free float market capitalization.

 

Methodology of the MSCI Europe Small Cap Factsheet Methodology

  • 940 (31/10/16) small cap stocks from the developed European countries
  • Index rebalancing takes place quarterly
  • Investable index has minimum size, free float, liquidity and length of trading criteria
  • Stock selection is based on free float market cap
  • Selection criteria: appr. lowest 15% (by free float market cap of companies) of the MSCI Europe Investable Market index
  • Index weighted by free float market cap
 

STOXX® Europe Small 200 Index

The STOXX® Europe Small 200 Index includes small sized companies from the underlying STOXX® Europe 600 Index which consists of 600 companies in the European region. STOXX® Europe Small 200 includes the smallest 200 stocks ranked by free float market capitalization.

 

Methodology of the STOXX® Europe Small 200 Factsheet Methodology

  • 200 small cap stocks from STOXX® Europe 600 Index
  • The index contains stocks from European countries
  • Index rebalancing on quarterly basis
  • Stock selection is based on their free float market cap
  • Selection criteria: smallest stocks ranked from 401 to 600 by their free float market cap in STOXX® Europe 600 Index are selected
  • Index weighted by free float market capitalization
  • Weight per constituents is capped at 20%
 

European Small Cap ETFs in comparison

The most important factors at a glance

When choosing a European 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 European small cap ETFs with details on size, cost, age, income, domicile and replication method ranked by fund size.

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

Provider
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI EMU Small Cap UCITS ETFIE00B3VWMM18 457 0.58% p.a. Accumulating Ireland Optimized sampling
iShares EURO STOXX Small UCITS ETFIE00B02KXM00 413 0.40% p.a. Distributing Ireland Optimized sampling
iShares STOXX Europe Small 200 UCITS ETF (DE)DE000A0D8QZ7 407 0.20% p.a. Distributing Germany Full replication
db x-trackers MSCI Europe Small Cap Index UCITS ETF (DR) 1CLU0322253906 365 0.40% p.a. Accumulating Luxembourg Optimized sampling
Lyxor UCITS ETF MSCI EMU Small Cap EURFR0010168773 210 0.40% p.a. Distributing France Unfunded swap
ComStage MSCI Europe Small Cap TRN UCITS ETFLU0392496344 42 0.35% p.a. Accumulating Luxembourg Unfunded swap
SPDR MSCI Europe Small Cap UCITS ETFIE00BKWQ0M75 42 0.30% p.a. Accumulating Ireland Optimized sampling
WisdomTree Europe SmallCap Dividend UCITS ETFDE000A14ND46 38 0.38% p.a. Distributing Ireland Full replication
Amundi ETF EURO STOXX Small Cap UCITS ETFFR0010900076 31 0.30% p.a. Accumulating France Unfunded swap
SPDR MSCI Europe Small Cap Value Weighted UCITS ETFIE00BSPLC298 30 0.30% p.a. Accumulating Ireland Optimized sampling
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-disLU0671493277 27 0.33% p.a. Distributing Luxembourg Full replication
Source STOXX Europe Small 200 UCITS ETF AIE00B60SWZ49 12 0.35% p.a. Accumulating Ireland Unfunded swap
Lyxor J.P. Morgan Europe Low Size Factor Index UCITS ETF C-EURLU1218123047 10 0.30% p.a. Accumulating Luxembourg Unfunded swap

Source: justETF.com; As of 04/12/16

 

Return comparison of all Small Cap ETFs on European equities

The table shows the returns of all European 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 %
WisdomTree Europe SmallCap Dividend UCITS ETF 1.14% 1.00% -3.22% -2.82% -
iShares MSCI EMU Small Cap UCITS ETF -1.84% -1.39% -1.83% -4.00% 28.25%
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis -2.10% -1.62% -2.10% -4.27% 27.25%
Lyxor UCITS ETF MSCI EMU Small Cap EUR -2.00% -1.60% -2.37% -4.58% 25.26%
SPDR MSCI Europe Small Cap Value Weighted UCITS ETF 1.12% 1.80% -2.39% -5.56% -
db x-trackers MSCI Europe Small Cap Index UCITS ETF (DR) 1C 0.97% -0.56% -3.16% -5.59% 29.34%
ComStage MSCI Europe Small Cap TRN UCITS ETF 0.80% -0.73% -3.08% -5.95% 28.57%
SPDR MSCI Europe Small Cap UCITS ETF 0.96% -0.74% -3.69% -6.71% -
iShares STOXX Europe Small 200 UCITS ETF (DE) 1.26% -0.52% -2.43% -7.01% 18.76%
Source STOXX Europe Small 200 UCITS ETF A 1.15% -0.70% -2.64% -7.47% 17.51%
Amundi ETF EURO STOXX Small Cap UCITS ETF -1.38% 0.00% -2.56% -7.55% 9.33%
iShares EURO STOXX Small UCITS ETF -1.52% 0.01% -2.53% -7.61% 10.93%
Lyxor J.P. Morgan Europe Low Size Factor Index UCITS ETF C-EUR -0.54% -1.15% -2.27% -11.94% -
ETF   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
WisdomTree Europe SmallCap Dividend UCITS ETF -1.15% 23.92% - - -
SPDR MSCI Europe Small Cap Value Weighted UCITS ETF -2.08% - - - -
iShares MSCI EMU Small Cap UCITS ETF -2.72% 24.52% 4.92% 33.54% 23.82%
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis -3.01% 24.42% 4.67% 33.34% 23.20%
Lyxor UCITS ETF MSCI EMU Small Cap EUR -3.30% 24.01% 3.74% 33.30% 23.40%
db x-trackers MSCI Europe Small Cap Index UCITS ETF (DR) 1C -3.34% 23.53% 6.11% 33.01% 26.08%
ComStage MSCI Europe Small Cap TRN UCITS ETF -4.16% 24.36% 6.06% 33.22% 25.52%
iShares EURO STOXX Small UCITS ETF -4.34% 13.66% 1.34% 24.69% 16.56%
iShares STOXX Europe Small 200 UCITS ETF (DE) -4.34% 16.49% 4.56% 26.72% 22.23%
SPDR MSCI Europe Small Cap UCITS ETF -4.40% 23.58% - - -
Source STOXX Europe Small 200 UCITS ETF A -4.56% 15.27% 4.58% 26.27% 23.36%
Amundi ETF EURO STOXX Small Cap UCITS ETF -5.12% 13.06% 0.24% 24.49% 16.39%
Lyxor J.P. Morgan Europe Low Size Factor Index UCITS ETF C-EUR -6.87% - - - -

Source: justETF.com; As of 30/11/16; Calculations in EUR including dividends