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 Small Cap 600 and 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.
The best USA Small Cap ETF by 1-year fund return as of 30/11/18
| 1 | ComStage S&P SmallCap 600 UCITS ETF | 7.52% | ||
| 2 | iShares S&P SmallCap 600 UCITS ETF | 7.45% | ||
| 3 | iShares MSCI USA Small Cap UCITS ETF (Acc) | 5.66% |
All USA small cap ETFs ranked by fund return
The largest USA Small Cap ETF by fund size in EUR
| 1 | iShares S&P SmallCap 600 UCITS ETF | 1,142 m | ||
| 2 | Xtrackers Russell 2000 UCITS ETF 1C | 599 m | ||
| 3 | SPDR Russell 2000 US Small Cap UCITS ETF | 515 m |
All USA small cap ETFs ranked by fund size
The cheapest USA Small Cap ETF by total expense ratio
| 1 | SPDR MSCI USA Small Cap Value Weighted UCITS ETF | 0.30% p.a. | ||
| 2 | SPDR Russell 2000 US Small Cap UCITS ETF | 0.30% p.a. | ||
| 3 | Xtrackers Russell 2000 UCITS ETF 1C | 0.30% p.a. |
All USA small cap ETFs ranked by total expense ratio
Indices on USA Small Cap Stocks compared
Methodologies of the compared indices
| MSCI USA Small Cap | Russell 2000® | S&P Small Cap 600 | |
|---|---|---|---|
| Number of ETFs | 1 ETF | 5 ETFs | 2 ETFs |
| Number of constituents | 1,789 (28/09/18) |
2,000 | 600 |
| Investment universe | MSCI USA Investable Market Index: 2,449 constituents (31/03/2017) | Russell 3000® Index: 3,000 US companies representing approximately 98% of the investable US equity market | S&P 1500® Composite Index: appr. 1,500 companies representing appr. 91% of the available US market cap |
| Index rebalancing | Quarterly | Annually (new IPOs additions quarterly) | Quarterly |
| Selection criteria | Companies ranked by size covering appr. lowest 14% of the free float-adjusted market cap in the US | Companies ranked 1,001 to 3,000 by total market cap in the underlying Russell 3000® Index | Companies with unadjusted market cap of 400 million to 1.8 billion USD |
| Index weighting | Market cap (free float) |
Total market cap | Market cap (free float) |
Source: justETF Research; As of 31/03/2017
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 appr. lowest 14% (by free float market cap of companies) of the free float-adjusted market capitalization of the US investable market. The index is based on free float market capitalization.
Methodology of the MSCI USA Small Cap Factsheet Methodology
- Appr. 1,789 (28/09/18) small cap stocks from the United States
- 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 in the US
- Index weighted by free float market cap
Russell 2000® Index
The Russell 2000® Index measures the performance of the small cap segment of the US equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index. It includes appr. 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index represents appr. 10% of the total market capitalization of the Russell 3000® Index.
Methodology of the Russell 2000® Factsheet Methodology
- Appr. 2000 small cap stocks from the United States
- Index rebalancing takes place annually, except for the additions due to new IPO, which take place quarterly
- Underlying investable 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
- Companies ranked 1001 to 3000 by total market cap in the underlying Russell 3000® Index are included
- Index weighted by total market cap
S&P Small Cap 600 Index
The S&P Small Cap 600 Index includes 600 small cap US stocks from the underlying S&P 1500® Composite Index. Companies with an unadjusted market cap of 400 million to 1.8 billion USD are included in the index.
Methodology of the S&P SmallCap 600 Factsheet Methodology
- 600 small cap stocks from the United States
- Index rebalancing takes place quarterly
- Index is a subset of S&P 1500® Composite Index and covers more than 3% of available US market cap
- Index has minimum liquidity, free float and financial viability (positive earnings in the last year and quarter) inclusion criteria
- Selection criteria: companies with unadjusted market cap of 400 million to 1.8 billion USD are included
- Index weighted by free float market cap
USA Small Cap ETFs in comparison
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 EUR |
TER in % |
Use of profits | Fund domicile | Replication method | |
|---|---|---|---|---|---|---|
| iShares S&P SmallCap 600 UCITS ETFIE00B2QWCY14 | 1,142 | 0.40% p.a. | Distributing | Ireland | Optimized sampling | |
| Xtrackers Russell 2000 UCITS ETF 1CIE00BJZ2DD79 | 599 | 0.30% p.a. | Accumulating | Ireland | Full replication | |
| SPDR Russell 2000 US Small Cap UCITS ETFIE00BJ38QD84 | 515 | 0.30% p.a. | Accumulating | Ireland | Optimized sampling | |
| iShares MSCI USA Small Cap UCITS ETF (Acc)IE00B3VWM098 | 483 | 0.43% p.a. | Accumulating | Ireland | Optimized sampling | |
| Invesco Russell 2000 UCITS ETFIE00B60SX402 | 170 | 0.45% p.a. | Accumulating | Ireland | Unfunded swap | |
| Amundi Russell 2000 UCITS ETF - EUR (C)LU1681038672 | 68 | 0.35% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| ComStage S&P SmallCap 600 UCITS ETFLU0392496005 | 65 | 0.35% p.a. | Distributing | Luxembourg | Unfunded swap | |
| L&G Russell 2000 US Small Cap UCITS ETFDE000A0Q8NE4 | 41 | 0.46% p.a. | Accumulating | Ireland | Unfunded swap | |
| SPDR MSCI USA Small Cap Value Weighted UCITS ETFIE00BSPLC413 | 39 | 0.30% p.a. | Accumulating | Ireland | Optimized sampling | |
| WisdomTree US SmallCap Dividend UCITS ETFDE000A14ND20 | 10 | 0.38% p.a. | Distributing | Ireland | Full replication |
Source: justETF.com; As of 14/12/18
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 % |
|
|---|---|---|---|---|---|---|
| ComStage S&P SmallCap 600 UCITS ETF | 1.47% | -8.98% | -2.73% | 7.52% | 27.08% | |
| iShares S&P SmallCap 600 UCITS ETF | 1.51% | -9.02% | -2.78% | 7.45% | 30.22% | |
| iShares MSCI USA Small Cap UCITS ETF (Acc) | 2.62% | -7.34% | -2.60% | 5.66% | 24.78% | |
| Amundi Russell 2000 UCITS ETF - EUR (C) | 2.24% | -8.65% | -4.11% | 5.61% | 23.03% | |
| SPDR Russell 2000 US Small Cap UCITS ETF | 2.03% | -8.61% | -4.29% | 4.48% | 22.63% | |
| Invesco Russell 2000 UCITS ETF | 1.98% | -8.69% | -4.31% | 4.44% | 22.55% | |
| Xtrackers Russell 2000 UCITS ETF 1C | 1.98% | -8.70% | -4.35% | 4.40% | 22.01% | |
| L&G Russell 2000 US Small Cap UCITS ETF | 1.96% | -8.74% | -4.46% | 4.18% | 22.33% | |
| SPDR MSCI USA Small Cap Value Weighted UCITS ETF | 1.50% | -7.09% | -3.54% | 3.28% | 18.28% | |
| WisdomTree US SmallCap Dividend UCITS ETF | 1.10% | -5.03% | -1.93% | 1.55% | 21.91% |
| ETF | 2018 in % |
2017 in % |
2016 in % |
2015 in % |
2014 in % |
|
|---|---|---|---|---|---|---|
| ComStage S&P SmallCap 600 UCITS ETF | 9.43% | 1.83% | 22.03% | 6.58% | 22.34% | |
| iShares S&P SmallCap 600 UCITS ETF | 9.38% | -1.01% | 30.05% | 8.68% | 19.44% | |
| Amundi Russell 2000 UCITS ETF - EUR (C) | 6.83% | 0.44% | 24.25% | 5.94% | - | |
| iShares MSCI USA Small Cap UCITS ETF (Acc) | 6.56% | 2.39% | 23.03% | 7.10% | 21.00% | |
| SPDR Russell 2000 US Small Cap UCITS ETF | 6.30% | 0.17% | 24.95% | 7.29% | - | |
| Invesco Russell 2000 UCITS ETF | 6.18% | 0.32% | 24.72% | 6.12% | 18.61% | |
| L&G Russell 2000 US Small Cap UCITS ETF | 5.93% | 0.28% | 24.73% | 6.28% | 18.71% | |
| Xtrackers Russell 2000 UCITS ETF 1C | 4.89% | 1.40% | 24.39% | - | - | |
| SPDR MSCI USA Small Cap Value Weighted UCITS ETF | 3.75% | -3.85% | 29.97% | - | - | |
| WisdomTree US SmallCap Dividend UCITS ETF | 3.19% | -5.19% | 34.06% | 4.40% | - |
Source: justETF.com; As of 30/11/18; Calculations in EUR including dividends