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.
The best European Small Cap ETF by 1-year fund return as of 30/11/2024
| 1 | WisdomTree Europe SmallCap Dividend UCITS ETF Acc | 9.69% | ||
| 2 | WisdomTree Europe SmallCap Dividend UCITS ETF | 9.62% | ||
| 3 | Xtrackers MSCI Europe Small Cap UCITS ETF 1C | 9.45% |
All European small cap ETFs ranked by fund return
The largest European Small Cap ETF by fund size in GBP
| 1 | Xtrackers MSCI Europe Small Cap UCITS ETF 1C | 1,645 m | ||
| 2 | iShares MSCI EMU Small Cap UCITS ETF (Acc) | 705 m | ||
| 3 | iShares EURO STOXX Small UCITS ETF | 340 m |
All European small cap ETFs ranked by fund size
The cheapest European Small Cap ETF by total expense ratio
| 1 | Xtrackers MSCI Europe Small Cap UCITS ETF 1C | 0.30% p.a. | ||
| 2 | UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis | 0.33% p.a. | ||
| 3 | WisdomTree Europe SmallCap Dividend UCITS ETF | 0.38% p.a. |
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 | 2 ETFs | 1 ETF | 1 ETF |
| Number of constituents | 88 (30/06/2021) | 388 (30/09/2024) | 870 (30/09/2024) | 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
- 88 (as of 30/06/2021) 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
- 388 (as of 30/09/2024) 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
- 870 (as of 30/09/2024) 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
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 | |
|---|---|---|---|---|---|---|
| Xtrackers MSCI Europe Small Cap UCITS ETF 1CLU0322253906 | 1,645 | 0.30% p.a. | Accumulating | Luxembourg | Optimized sampling | |
| iShares MSCI EMU Small Cap UCITS ETF (Acc)IE00B3VWMM18 | 705 | 0.58% p.a. | Accumulating | Ireland | Optimized sampling | |
| iShares EURO STOXX Small UCITS ETFIE00B02KXM00 | 340 | 0.40% p.a. | Distributing | Ireland | Optimized sampling | |
| UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-disLU0671493277 | 191 | 0.33% p.a. | Distributing | Luxembourg | Full replication | |
| WisdomTree Europe SmallCap Dividend UCITS ETFIE00BQZJC527 | 23 | 0.38% p.a. | Distributing | Ireland | Full replication | |
| WisdomTree Europe SmallCap Dividend UCITS ETF AccIE00BDF16114 | 21 | 0.38% p.a. | Accumulating | Ireland | Full replication |
Source: justETF.com; As of 17/12/2024
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 Acc | -0.85% | -5.53% | -6.44% | 9.69% | 2.18% | |
| WisdomTree Europe SmallCap Dividend UCITS ETF | -0.91% | -5.61% | -6.49% | 9.62% | 2.13% | |
| Xtrackers MSCI Europe Small Cap UCITS ETF 1C | -0.92% | -3.82% | -4.52% | 9.45% | -4.40% | |
| UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis | -1.12% | -4.30% | -9.32% | 1.25% | -2.78% | |
| iShares MSCI EMU Small Cap UCITS ETF (Acc) | -1.13% | -4.34% | -9.33% | 1.14% | -3.38% | |
| iShares EURO STOXX Small UCITS ETF | -1.42% | -4.33% | -8.51% | -0.98% | -5.62% |
| ETF | 2024 in % | 2023 in % | 2022 in % | 2021 in % | 2020 in % | |
|---|---|---|---|---|---|---|
| Xtrackers MSCI Europe Small Cap UCITS ETF 1C | 1.57% | 10.48% | -18.38% | 16.60% | 10.19% | |
| WisdomTree Europe SmallCap Dividend UCITS ETF Acc | 0.86% | 8.15% | -11.21% | 19.66% | 0.79% | |
| WisdomTree Europe SmallCap Dividend UCITS ETF | 0.58% | 8.12% | -11.16% | 19.59% | 0.75% | |
| UBS ETF (LU) MSCI EMU Small Cap UCITS ETF (EUR) A-dis | -4.11% | 12.24% | -11.95% | 15.58% | 11.65% | |
| iShares MSCI EMU Small Cap UCITS ETF (Acc) | -4.22% | 11.98% | -12.18% | 14.86% | 11.67% | |
| iShares EURO STOXX Small UCITS ETF | -6.90% | 11.61% | -10.77% | 13.08% | 15.19% |
Source: justETF.com; As of 30/11/2024; Calculations in GBP including dividends