Intro - 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 - Small Cap Indexes
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 - Small Cap Indexes
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 - small cap indexes
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.
Spotlight - Small cap indexes
Spotlight on small caps research
Current attributes - small cap indexes
Current attributes of small caps
current - related content - small cap indexes
Small caps in the macro landscape - heading - small cap indexes
Small caps in the macro landscape
Small caps in the macro landscape - small cap indexes
ESG and climate - heading - small cap indexes
ESG and climate opportunities in small caps
ESG and climate opportunities in small caps - small cap indexes
Related content - small cap indexes
Footnotes - Small cap indexes
- 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.