Best Small Cap ETF in Australia (2026)
Small cap ETFs hold the companies below the biggest 100 or so. They have tended to swing more than large caps, in both directions, and the fees are higher.
Of the 9 ETFs we compared, IJR has the lowest fee (0.07% a year) and QSML is the largest ($1.6bn). IJH had the best five-year return, +7.8% a year. Over 5 years, VSO tracked its index most closely after fees. The right one depends on your goals: read what to consider below.
Data to 30 September 2026 from the TMX Australia funds report. Returns include distributions. General information only, not a recommendation.
All the options compared
Australian small companies
Track the S&P/ASX Small Ordinaries, the MSCI Australian small cap index or a rules-based version of them.
| Code | ETF | Fee | Size | 1Y | 5Y a year | Spread |
|---|---|---|---|---|---|---|
| VSO | Vanguard MSCI Australian Small Companies Index ETF | 0.30% | $1.2bn | −0.1% | +4.8% | 0.07% |
| SMLL | Betashares Australian Small Companies Select ETF | 0.39% | $369m | +4.3% | +4.7% | 0.38% |
| MVS | VanEck Small Companies Masters ETF | 0.49% | $186m | −2.1% | +2.3% | 0.15% |
| ISO | iShares S&P/ASX Small Ordinaries ETF | 0.55% | $136m | −6.9% | +0.9% | 0.28% |
| SSO | State Street SPDR S&P/ASX Small Ordinaries ETF | 0.50% | $27m | −6.9% | +0.9% | 0.16% |
Global and US small companies
Small and mid-sized companies outside Australia.
| Code | ETF | Fee | Size | 1Y | 5Y a year | Spread |
|---|---|---|---|---|---|---|
| QSML | VanEck MSCI International Small Companies Quality ETFLargest | 0.59% | $1.6bn | −1.4% | +7.1% | 0.06% |
| VISM | Vanguard MSCI International Small Companies Index ETF | 0.32% | $952m | +10.4% | +6.6% | 0.05% |
| IJR | iShares S&P Small-Cap ETFLowest fee | 0.07% | $827m | +10.6% | +5.9% | 0.06% |
| IJH | iShares S&P Midcap ETFBest 5Y | 0.07% | $485m | +6.4% | +7.8% | 0.07% |
Compare the biggest side by side → · Check how much they overlap →
Spread is the average gap between the buy and sell price: lower is cheaper to trade. 5Y a year is the average yearly total return over five years. Past performance is not a reliable indicator of future performance.
How closely each small cap ETF tracks its index
An index fund should return its index, less its fee. The gap below is each fund's return after fees minus its own benchmark. A gap close to zero means it has done its job well. Over 5 years, VSO tracked its index most closely among the Australian small companies, trailing it by only 0.01% a year.
| ETF and benchmark | Fee | 1Y gap | 3Y gap a year | 5Y gap a year | Verdict |
|---|---|---|---|---|---|
| IJHS&P MidCap 400 Index (net, AUD) | 0.07% | +0.20% | +0.22% | +0.21% | Ahead of its index |
| IJRS&P SmallCap 600 Index (net, AUD) | 0.07% | +0.19% | +0.24% | +0.20% | Ahead of its index |
| VISMMSCI World ex-Australia Small Cap Index (AUD) | 0.32% | +0.00% | -0.02% | +0.05% | Tracking well |
| VSOMSCI Australian Shares Small Cap Index | 0.30% | +0.41% | -0.01% | -0.01% | Tracking well |
| QSMLMSCI World ex Australia Small Cap Quality 150 Index | 0.59% | -0.47% | -0.50% | -0.48% | Tracking well |
| SMLLNasdaq Australia Small Cap Select Index | 0.39% | -0.47% | -0.64% | -0.54% | Tracking well |
Gap = fund return after fees minus its benchmark. Issuer figures to October 2026. Hedged funds are measured against the hedged version of their index. Funds without published benchmark figures are left out. See every ETF vs its benchmark →
What to consider
- More ups and downs. Small companies have swung more than the ASX 200 and can lag for years at a time. Most investors keep them to a small slice.
- Screens matter. SMLL and QSML filter for profitable or quality companies, while VSO and ISO hold the whole index. That can change returns a lot.
- Fees are higher than for large-cap funds, so check how each has tracked its index.
- Overlap is low with ASX 200 funds, so small caps add genuine diversification. Check the overlap.
