Small Cap Indexes

All companies start small, and over time, they grow if they have the right product and employ the right strategy at the right time. The breadth of the small cap universe is extensive, encompassing both developed and emerging markets, and it is full of opportunities and possibilities. For example, while the MSCI World Index comprises around 1,500 constituents, the MSCI World Small Cap Index boasts over 4,100¹. In emerging markets, the MSCI EM Index includes over 1,400 names, whereas the MSCI EM Small Cap Index features nearly 2,000.

In addition to being larger in number, small cap companies also offer a diversified set of sector and industry exposures.

While smaller in size, small caps may have a big impact

In the two decades since the first MSCI small cap indexes were launched, investors have increased their familiarity and comfort with this market segment. Furthermore, both academic² and MSCI research have demonstrated that small caps possess unique characteristics that may provide diversification benefits and enhance potential returns over time. Today, small caps are a key part of MSCI’s index offering.

Expanding existing allocations

We use a dynamic approach to classify companies into size segments: large, mid or small caps. It is purposely created that way to ensure that indexes remain agile and evolve with the markets they are looking to capture.

*Indicative, may vary by +/-5%

Broad set of opportunities

Examining small caps through a sector-specific lens and contrasting them with their larger counterparts helps showcase the breadth of opportunities in small caps.

As of December 31, 2023

Consumer Discretionary and Energy are the two sectors in the MSCI ACWI Investable Market Index (IMI) where there are more small cap companies than large/mid cap companies. Utilities is the only sector where the number of companies is similar across large/mid and small cap companies.

Learn more about our small cap indexes

• Brochure (PDF 773 KB)
• MSCI World Small Cap Factsheet (PDF, 179 KB)
• MSCI EM Small Cap Factsheet (PDF, 185 KB)
• MSCI ACWI Small Cap (PDF, 179 KB)

Spotlight on small caps research

• ¹ All data is as of December 31, 2023.
• ² Fama, Eugene F & French, Kenneth R, 1992. "The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-465, June.