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 the 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.

0.14% p.a. - 0.58% p.a.
annual total expense ratio (TER) of European small cap ETFs
on European small cap stocks, which are 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 30/09/20

All European small cap ETFs ranked by fund return

 

The largest European Small Cap ETF by fund size in GBP

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 most important indices

EURO STOXX® Small MSCI EMU Small Cap MSCI Europe Small Cap STOXX® Europe Small 200
Number of ETFs 1 ETF 3 ETFs 2 ETFs 2 ETFs
Number of constituents
426
(30/09/20)
944
(30/09/20)
200
Investment universe EURO STOXX® index: appr. 300 companies from the Eurozone MSCI EMU Investable Market Index: appr. 700 companies from the Eurozone MSCI Europe Investable Market Index: appr. 1,400 companies from Europe STOXX® Europe index: 600 companies from 17 European countries
Index rebalancing Quarterly Quarterly Quarterly Quarterly
Selection criteria The smallest firms (bottom third) of the underlying EURO STOXX® index The smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI EMU Investable Market Index The smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI Europe Investable Market Index The 200 smallest firms from the 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 31/01/2020

 

EURO STOXX® Small index

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

 

Methodology of the EURO STOXX® Small Factsheet Methodology

  • (as of ) small cap stocks from the Eurozone
  • Index rebalancing takes place quarterly
  • Stock selection is based on the size of companies
  • Selection criteria: the bottom third of the EURO STOXX® index is selected
  • Index weighted by free float market capitalization
 

MSCI EMU Small Cap index

The MSCI EMU Small Cap index captures small cap stocks across 10 developed countries in the Eurozone. The index represents the smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI EMU Investable Market Index. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the MSCI EMU Small Cap Factsheet Methodology

  • 426 (as of 30/09/20) small cap stocks from developed Eurozone countries
  • 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 EMU Investable Market Index
  • Index weighted by free float market capitalization
 

MSCI Europe Small Cap index

The MSCI Europe Small Cap index includes small cap stocks from 15 developed countries in Europe. The index represents the smallest firms (appr. 14 percent of the free float-adjusted market cap) of the MSCI Europe Investable Market Index. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the MSCI Europe Small Cap Factsheet Methodology

  • 944 (as of 30/09/20) small cap stocks from developed European countries
  • 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 Europe Investable Market Index
  • Index weighted by free float market capitalization
 

STOXX® Europe Small 200 index

The STOXX® Europe Small 200 index tracks the 200 smallest companies (as measured by free float market cap) from the underlying STOXX® Europe 600 index, which consists of 600 European companies. The stocks passing the selection screen are weighted by their free float market capitalization.

 

Methodology of the STOXX® Europe Small 200 Factsheet Methodology

  • 200 small cap stocks from European countries
  • Index rebalancing takes place quarterly
  • Stock selection is based on their free float market cap
  • Selection criteria: The 200 smallest stocks (ranked from 401 to 600) from the STOXX® Europe 600 index are selected
  • Index weighted by free float market capitalization
 

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 GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI EMU Small Cap UCITS ETF (Acc)IE00B3VWMM18 538 0.58% p.a. Accumulating Ireland Optimized sampling
Xtrackers MSCI Europe Small Cap UCITS ETF 1CLU0322253906 474 0.30% p.a. Accumulating Luxembourg Optimized sampling
iShares EURO STOXX Small UCITS ETFIE00B02KXM00 327 0.40% p.a. Distributing Ireland Optimized sampling
Lyxor MSCI EMU Small Cap (DR) UCITS ETF - DistLU1598689153 180 0.40% p.a. Distributing Luxembourg Full replication
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-disLU0671493277 117 0.33% p.a. Distributing Luxembourg Full replication
SPDR MSCI Europe Small Cap UCITS ETFIE00BKWQ0M75 106 0.30% p.a. Accumulating Ireland Optimized sampling
SPDR MSCI Europe Small Cap Value Weighted UCITS ETFIE00BSPLC298 19 0.30% p.a. Accumulating Ireland Optimized sampling
Invesco S&P SmallCap 600 UCITS ETF AIE00BH3YZ803 2 0.14% p.a. Accumulating Ireland Unfunded swap

Source: justETF.com; As of 19/10/20

 

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 %
iShares EURO STOXX Small UCITS ETF -0.19% 3.88% 27.47% 4.09% 7.96%
Xtrackers MSCI Europe Small Cap UCITS ETF 1C 1.50% 5.99% 33.55% 3.13% 5.40%
SPDR MSCI Europe Small Cap UCITS ETF 1.17% 6.15% 33.32% 3.07% 5.51%
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis 1.44% 4.89% 31.89% 1.79% 1.99%
iShares MSCI EMU Small Cap UCITS ETF (Acc) 1.39% 4.82% 31.85% 1.43% 1.58%
Lyxor MSCI EMU Small Cap (DR) UCITS ETF - Dist 1.36% 4.71% 31.60% 1.27% 1.21%
SPDR MSCI Europe Small Cap Value Weighted UCITS ETF -1.06% 2.33% 25.76% -10.32% -14.50%
Invesco S&P SmallCap 600 UCITS ETF A -2.52% -1.37% 21.50% -12.25% -
ETF   2020
in %
2019
in %
2018
in %
2017
in %
2016
in %
iShares EURO STOXX Small UCITS ETF 0.99% 20.19% -12.50% 26.40% 18.24%
UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis -2.28% 22.09% -16.59% 28.58% 20.54%
iShares MSCI EMU Small Cap UCITS ETF (Acc) -2.54% 22.01% -16.60% 28.62% 20.57%
Lyxor MSCI EMU Small Cap (DR) UCITS ETF - Dist -2.65% 21.90% -16.68% 28.82% 20.32%
Xtrackers MSCI Europe Small Cap UCITS ETF 1C -3.86% 25.01% -15.21% 23.30% 18.11%
SPDR MSCI Europe Small Cap UCITS ETF -3.96% 25.11% -14.99% 22.98% 16.63%
Invesco S&P SmallCap 600 UCITS ETF A -12.87% - - - -
SPDR MSCI Europe Small Cap Value Weighted UCITS ETF -16.24% 20.72% -17.50% 17.11% 21.33%

Source: justETF.com; As of 30/09/20; Calculations in GBP including dividends