Micro-Cap ETF Definition

Learn the definition of micro-cap ETF and other ETF terminology from the etf.com glossary.

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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Learn more about Micro-Cap ETF

A Micro-Cap ETF concentrates its investment focus on the stocks of companies characterized by very small market capitalizations, typically between $50 million and $300 million in market capitalization. By honing in on these nascent entities, the ETF provides investors with a unique avenue to tap into the potential growth associated with micro-cap stocks. While offering the allure of undiscovered gems and untapped potential, Micro-Cap ETFs are often associated with higher volatility and risk. Investors attracted to these funds appreciate the prospect of identifying emerging opportunities within the market, understanding that the dynamic nature of micro-cap stocks introduces both opportunities and challenges within the ETF's portfolio.

Related Terms

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.