U.S. small caps have not delivered much to be excited about this year, as the Russell 2000 – the benchmark small-cap index – is off 3.2 percent year-to-date.
However, the possibility of more quantitative easing from the European Central Bank (ECB) could spell opportunity with European small caps.
Gaining Exposure To Smaller Euro Stocks
Fortunately for conservative investors, they do not need to buy small-cap-specific exchange-traded funds to get exposure to smaller European stocks; some well-known, diversified Europe ETFs feature robust small-cap exposure. That includes the Vanguard FTSE Europe ETF (NYSE: VGK), the second-largest Europe ETF by assets.
Vanguard ETFs
Earlier this year, Vanguard announced index changes for some of its international ETFs, but market observers primarily focused on the addition of China A-shares to the Vanguard Emerging Markets Stock Index Fd (NYSE: VWO). Lost in the shuffle was VGK transitioning to an index with more exposure to European small caps.
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