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.

0.14% p.a. - 0.49% 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 30/09/2024

All USA small cap ETFs ranked by fund return

 

The largest USA Small Cap ETF by fund size in GBP

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 0 ETFs 5 ETFs 2 ETFs
Number of constituents 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

 

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 GBP
TER
in %
Use of profits Fund domicile Replication method
SPDR Russell 2000 US Small Cap UCITS ETFIE00BJ38QD84 2,603 0.30% p.a. Accumulating Ireland Optimized sampling
iShares S&P SmallCap 600 UCITS ETFIE00B2QWCY14 1,591 0.30% p.a. Distributing Ireland Optimized sampling
iShares MSCI USA Small Cap ESG Enhanced UCITS ETF (Acc)IE00B3VWM098 1,420 0.43% p.a. Accumulating Ireland Optimized sampling
Xtrackers Russell 2000 UCITS ETF 1CIE00BJZ2DD79 1,126 0.30% p.a. Accumulating Ireland Full replication
SPDR MSCI USA Small Cap Value Weighted UCITS ETFIE00BSPLC413 418 0.30% p.a. Accumulating Ireland Optimized sampling
Invesco Russell 2000 UCITS ETF AccIE00B60SX402 154 0.25% p.a. Accumulating Ireland Unfunded swap
L&G Russell 2000 US Small Cap Quality UCITS ETFIE00B3CNHJ55 119 0.30% p.a. Accumulating Ireland Optimized sampling
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (dist)IE0001O84583 114 0.14% p.a. Distributing Ireland Full replication
Invesco S&P SmallCap 600 UCITS ETF AIE00BH3YZ803 80 0.14% p.a. Accumulating Ireland Unfunded swap
Amundi Russell 2000 UCITS ETF USDLU1681038839 78 0.35% p.a. Accumulating Luxembourg Unfunded swap
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (acc)IE000JNKVS10 35 0.14% p.a. Accumulating Ireland Full replication
VanEck Morningstar US SMID Moat UCITS ETF AIE000SBU19F7 7 0.49% p.a. Accumulating Ireland Full replication
iShares Russell 2000 Swap UCITS ETF USD (ACC)IE0007O06KL9 4 0.20% p.a. Accumulating Ireland Swap-based

Source: justETF.com; As of 30/10/2024

 

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 %
SPDR MSCI USA Small Cap Value Weighted UCITS ETF -0.08% 5.06% 0.02% 16.61% 27.32%
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (acc) 0.22% 2.57% -2.40% 16.17% -
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (dist) 0.18% 2.57% -2.40% 16.10% -
Amundi Russell 2000 UCITS ETF USD -0.99% 3.04% -0.78% 15.50% 4.92%
Invesco Russell 2000 UCITS ETF Acc -0.98% 3.07% -0.97% 15.50% 4.75%
SPDR Russell 2000 US Small Cap UCITS ETF -0.99% 3.00% -1.10% 15.36% 4.60%
Xtrackers Russell 2000 UCITS ETF 1C -1.01% 3.00% -1.14% 15.34% 4.62%
Invesco S&P SmallCap 600 UCITS ETF A -0.84% 3.87% 0.24% 14.89% 12.42%
L&G Russell 2000 US Small Cap Quality UCITS ETF -0.65% 3.04% -0.61% 14.42% 11.43%
iShares S&P SmallCap 600 UCITS ETF -0.87% 3.75% -0.10% 14.31% 10.78%
iShares MSCI USA Small Cap ESG Enhanced UCITS ETF (Acc) -0.43% 2.56% -2.65% 13.82% 9.52%
iShares Russell 2000 Swap UCITS ETF USD (ACC) - - - - -
VanEck Morningstar US SMID Moat UCITS ETF A 0.54% 3.13% -3.89% - -
ETF   2024
in %
2023
in %
2022
in %
2021
in %
2020
in %
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (acc) 6.01% 11.93% - - -
Invesco Russell 2000 UCITS ETF Acc 5.23% 10.10% -11.22% 15.74% 15.54%
SPDR Russell 2000 US Small Cap UCITS ETF 5.17% 9.98% -11.20% 16.16% 15.42%
Xtrackers Russell 2000 UCITS ETF 1C 5.09% 10.12% -11.22% 15.70% 15.51%
JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (dist) 4.61% 12.01% - - -
SPDR MSCI USA Small Cap Value Weighted UCITS ETF 4.61% 14.60% 0.61% 37.09% 4.94%
iShares MSCI USA Small Cap ESG Enhanced UCITS ETF (Acc) 4.11% 9.37% -6.90% 20.36% 14.29%
Amundi Russell 2000 UCITS ETF USD 3.72% 10.26% -11.17% 15.75% 15.61%
L&G Russell 2000 US Small Cap Quality UCITS ETF 3.69% 11.63% -8.74% 21.06% 15.48%
iShares S&P SmallCap 600 UCITS ETF 3.25% 9.16% -6.65% 27.82% 7.06%
Invesco S&P SmallCap 600 UCITS ETF A 2.35% 9.62% -6.10% 28.24% 7.52%
iShares Russell 2000 Swap UCITS ETF USD (ACC) - - - - -
VanEck Morningstar US SMID Moat UCITS ETF A - - - - -

Source: justETF.com; As of 30/09/2024; Calculations in GBP including dividends