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Search for an ETF or holding
Search for an ETF or holding
Updated 2mo ago.
Updated 2mo ago.
A small-cap stock is a company with a market value generally between $300 million and $2 billion. These companies have high growth potential but also more volatility and risk than large caps.
In Canada, the XCS.TO ETF (iShares S&P/TSX SmallCap) provides access to small Canadian companies listed on the TSX. Historically, small caps have delivered higher returns than large caps over very long periods, but with steeper declines during crises.
Small caps add diversification and growth potential to a portfolio. However, they are riskier: less liquidity, less predictable financial results, and larger drops in bear markets. For a beginner, a small allocation (5-15%) to small caps through an ETF is more prudent than buying individual small-company stocks.