Small Cap-ETFs im Vergleich: Welche sind die besten für dein Portfolio? | extraETF

Summary

The video examines whether small-cap ETFs can improve portfolio diversification, compares their historical performance with large-cap benchmarks, and presents an example portfolio using three ETFs.

Performance and market context

In a comparison beginning in 2018, the iShares MSCI World ETF returned about 118%, versus roughly 69–70% for the iShares MSCI World Small Cap ETF. Large caps outperformed over that period. The presenter notes that small-cap performance had improved more recently, while the MSCI World’s substantial technology exposure contributed to its earlier strength.

A separate comparison beginning in June 2018 showed the MSCI World up about 122% and MSCI Japan Small Cap up about 19%. The presenter says US small caps performed best among the small-cap markets compared, while the Eurozone was around 40%. Results differed markedly by region.

Approximate long-term figures cited for the indices include:

• MSCI World Small Cap: about 6.7% annual return over 10 years, 17% volatility, and a dividend yield around 2–2.2%.
• Russell 2000: about 7% annual return, 20.3% volatility, and a lower dividend yield.
• MSCI Europe Small Cap: about 4.8% annual return.
• Emerging-market small caps: about 5.2% annual return, with similar or somewhat higher volatility.

These figures are historical comparisons, not forecasts.

What counts as a small cap?

Definitions vary. One conventional range mentioned is €300 million to €2 billion in market capitalization. Under the MSCI classification described by the presenter, stocks are grouped by cumulative market capitalization:

• 70% large caps
• The next 15% mid caps
• The next 14% small caps
• The final 1% microcaps

As a result, “small cap” can refer to companies of very different sizes in different markets. For example, the largest company in the MSCI World Small Cap Index was cited at about $14 billion, compared with about €1.4 billion for the largest company in Germany’s SDAX. The presenter recommends checking index factsheets to understand what an ETF actually holds.

Indices and instruments discussed

The video discusses the following indices and instruments:

• MSCI World and MSCI World Small Cap
• MSCI ACWI Small Cap — the presenter says no ETF tracking it was available at the time of the video. The index was described as covering about 6,100 stocks across developed and emerging markets.
• MSCI Emerging Markets IMI — includes large- and small-cap stocks.
• Russell 2000 — described as covering around 2,000 of the smaller US companies in the Russell 3000.
• S&P SmallCap 600
• MSCI USA Small Cap
• MSCI Europe Small Cap
• MSCI EMU Small Cap (Eurozone)
• MSCI Emerging Markets Small Cap
• MSCI Japan Small Cap
• SDAX, a German small-company index

Apple is used as an example of a highly liquid large-cap stock.

The MSCI World was described as holding roughly 1,600–1,700 stocks and covering about 85% of global market capitalization. Adding MSCI World Small Cap, with more than 4,000 holdings, was said to bring developed-market coverage to roughly 99%. The MSCI Europe Small Cap index was cited as having 881 stocks across 15 countries.

Example portfolio and construction approach

The presenter demonstrates a three-ETF portfolio with a 70% developed-market / 30% emerging-market allocation:

• 60% iShares Core MSCI World
• 10% MSCI World Small Cap
• 30% MSCI Emerging Markets IMI

The stated aim is to include large- and small-cap exposure across developed and emerging markets. Investors can adjust regional or small-cap weights themselves, or use a single global all-country IMI ETF instead. The example is illustrative, not a personalized recommendation.

Potential benefits and risks

Potential benefits

• Broader diversification through exposure to thousands of additional companies, with relatively little overlap with large-cap holdings.
• Different sector exposure and potentially less concentration in technology.
• Exposure to innovative businesses operating in niche markets.
• A potential risk premium, though the presenter cautions that it is neither guaranteed nor necessarily realized quickly; it may take years or even decades.
• Potentially attractive valuations in some market phases.

Risks and cautions

• Small-cap shares are generally less liquid than large-cap stocks. Trading spreads can widen during market stress, affecting ETF prices and trading costs.
• The presenter advises monitoring liquidity and market conditions, and suggests waiting for stressed markets to calm before trading in illiquid markets.
• Small caps are generally more volatile over long investment horizons, although large-cap indices can also experience sharp fluctuations.
• Performance varies substantially by region, so “small caps” are not a single uniform exposure.

Disclosures and sources

No explicit “not financial advice” disclaimer appears in the subtitles. The presenter refers viewers to extraETF’s ETF guides, index factsheets, comparison charts, and sample portfolio resources.

Presenter/source: An unnamed presenter on the extraETF YouTube channel.