There has been a number of studies done on how small cap value stocks tend to outperform coming out a bear market. Any chance Freetrade will be adding some small cap value indexes anytime soon?
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Would love to see small cap US & UK stocks added.
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I found out Trading212 have a quite a few small cap stocks and a small cap value index, it’s worth a shout.
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I am looking for USSC (US Small Cap Value) + EUSV (European Small Cap Value) ETFs too. Historically Value and Size factor have higher equity premiums.
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Maybe a semi-useful reply to the small cap value question. There is little out there I could find which tracks this and is easily available. However BMO Global Smaller Companies (investment trust), see here BGSC sort of fits the bill, it has been around since 1889, not a typo! It focuses on smaller companies and has an income/value bias. Recently it lagged the strong market returns as income/value were (and still are) out of favour. I first bought into this in Feb 2018 and have been holding it since.
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The catch 22 is, by holding BGSC for 20 - 30 years, you’re paying over 1% per year. The fees sure do add up.
A Global or US small cap value etf under 0.25% fees would be great for UK investors to have the option for.
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Sure, fees are an issue. According to the AIC the fees are 0.75% making it one of the cheapest in the Global Smaller Companies section. Edinburgh Worldwide is cheapest with 0.72% (which I also hold), number 3 Smithson with 0.85%, the remaining two charge over 1%, see GSC. Not fantastic in terms of cost but pretty good.
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