Small Cap Value

[Josh]

What are the small cap value options on Invest Engine?

[InvestEngine_Laura]

Hi Josh, you can find the small cap value options here: InvestEngine ETF range - Build Your Own ETF DIY Portfolio. You can search by small cap. ‘IMI’ or Investable Market Index may also be used in the ETF title to indicate this.

[Josh]

Hi I can see small cap and value options. But nothing that is small cap value. Can you share the tickers? Thank you!

[FilippoG]

Hi Josh!

As far as I know there are only two small cap value ETFs available for UK investors:

• SPDR MSCI Europe Small Cap Value Weighted UCITS ETF (ISIN IE00BSPLC298, Ticker ZPRX),
• SPDR MSCI USA Small Cap Value Weighted UCITS ETF (ISIN IE00BSPLC413, Ticker USSC).

Unfortunately, they aren’t available on InvestEngine at the moment. However, they would be an excellent addition for the future since it seems that value small cap is the only place where one can still hope to get the small cap premium!

[tom.winterton]

@FilippoG

IE00BSPLC298

Really interesting @FilippoG thanks for flagging…

I’ve had a conversation with our Investment team and unfortunately neither of these trades in GBP
- SPDR MSCI Europe Small Cap Value Weighted is only trading in EUR
- SPDR MSCI USA Small Cap Value Weighted trades in EUR & USD
(There JustETF.com pages shows a GBP quote which is a little misleading as looking at the factsheets there don’t appear to be any GBP share classes)

We’re not aware of any GBP LSE listed Small Cap Value weight ETFs that we can add to InvestEngine right now…But please let us know if you find anything. We’re continuing to look + ETF are launching all the time!

[jamesc]

A good site to check https://justetf.com/uk/how-to/invest-in-size-factor-etfs.html

If you search for “Small Cap” “Russell 2000” on Invest Engine you might find one suitable for you. They have a few to choose from.

[FilippoG]

Thanks for investigating the ETFs, @tom.winterton ! You’re right, they’re not trading in GBP… I’ve just seen on justetf.com that the size of the funds was given in GBP and I didn’t check the actual trading currency of the funds.

@Josh if you want a bit a value tilt within a small cap ETF another possible option is to use the following ETFs (which are already available on InvestEngine):

• Wisdomtree Emerging Market Small Cap (ISIN IE00BQZJBM26, Ticker DGSE)
• Wisdomtree Europe Small Cap Dividend (ISIN IE00BDF16114, Ticker DFEP for the accumulation version or ISIN IE00BQZJC527, Ticker DFE for the distribution one)

They are tracking two WisdomTree dividend weighted small cap indices but if you look on morningstar.co.uk you can see that they actually have a quite big exposure to the value factor. However, please be aware that they’re limited to Europe and Emerging Markets only and, more importantly, they have a rather small AUM (assets under management) (less than $50mln) despite being quite old ETFs. Indeed, their US counterpart has been redeemed a couple of years ago because it didn’t gather enough interest.

[jmsa]

Hi! I am a bit late to the thread…

Have a look at this US small cap ETF with a value tilt that is available in InvestEngine:

iShares S&P SmallCap 600 UCITS ETF USD (Dist) (GBP) | ISP6

Asset Allocation|Top 10 Holdings|iShares S&P SmallCap 600 UCITS ETF USD...

For what I understand the S&P SmallCap 600 is the Russell 2000 minus illiquid and unprofitable companies.

[Shrinkflation]

Noticed that this thread is a good 6 months old now, can anyone let me know if any SCV funds were added after this please? Based on my human capital, I’ve come to understand that the core of my asset allocation could be a Small Cap Value weighted ETF like the AVUV and AVDV ETFs or the ZPRV and ZPRX tickers… unfortunately these aren’t traded in GBP and on the LSE… Wondering if there are anything else I’ve missed out on in IE?

[PaulGichemi]

Hi @Shrinkflation Nice one for following up! YEs, we do have several small cap value funds. Please visit our ETF Range page and filter using key words 'Small cap"

[Shrinkflation]

Thank you Paul, but trust me there is no small cap value fund like you said there is (unless something is wrong with my search results). There are several small cap funds but no “small cap value” funds. Could you please correct me if I’m wrong?

[chungf]

There are indeed no ETF on InvestEngine that explicitly says “small cap value”.

But as @jmsa mentioned above, some ETFs available on InvestEngine says “small cap” on the tin, but if you look closer they are loaded with constituent stocks exhibiting value style characteristics.

I’ve looked up the growth vs. value style of every “small cap” ETF available on InvestEngine using Morningstar; here are the ones with varying degrees of value tilt:

• Deep value:
  • ISFE – iShares MSCI AC Far East ex-Japan Small Cap (Morningstar profile)
  • DGSE – WisdomTree Emerging Markets SmallCap (Morningstar profile)
• Slight value:
  • CES1 – iShares MSCI EMU Small Cap (Morningstar profile)
  • DFEP – WisdomTree Europe SmallCap (Acc) (Morningstar profile)
  • DFE – WisdomTree Europe SmallCap (Dist) (Morningstar profile)
  • ISP6 – iShares S&P SmallCap 600 (Morningstar profile)

Whether an ETF has “deep” value tilt is kinda subjective. I just made the call by scrolling to the “Factor profile” section and looking at the “style” slider.

If the deep blue dot leans heavily towards “value” and the light blue shaded area is narrow, I’d say the value tilt is “deep”. This is how it looks like for DGSE:

If the deep blue dot leans somewhat towards “value” but the light blue shaded area is wide and ventures into “growth” territory, I’d say the value tilt is not so deep. Here’s CES1:

All these ETF choices are region-specific though. I hope you find what you’re after.

[zaratrau]

Hi everyone , 2 ETFs that IE could add to the portfolio .This ETF WisdomTree International SmallCp Div ETF DLS could be a good option outside US and this Invesco S&P SmallCap 600® Pure Value ETF RZV only US . Thank you

[PaulGichemi]

Hi @zaratrau , Thank you for the suggestion. We currently only have ETFs available on InvestEngine. Mutual funds, Investment Trusts and Unit Trusts - while similar to ETFs, in some regards are typically traded in a different way and can have different tax rules.

These are being considered as part of our longer-term plans but we cannot at this stage add them to the platform. I have still forwarded your request to our investment team. There also may be similar or equivalent ETFs we can look to add.

[Finwiz]

Russell 2000 lacks a quality filter unlike S&P 600. I expect Russell contains more pre profit small crap growth stocks.