Small caps – the most important things in brief
Small caps are companies with a stock market value in the two to three-digit million range. In contrast to the standard values from the leading German index DAX or from the EURO STOXX 50, second-line stocks are often active in niche markets. Institutional investors pay little attention to small caps because of the low market volume and thin trading volume. Small caps are therefore also referred to as “second-tier companies”.
An investment in the so-called “small stocks” is associated with greater opportunities for investors, but also increased risks. shares of Small caps usually fluctuate much more than the share certificates of well-known corporations. Double-digit price gains and losses within a short period of time are therefore the rule rather than the exception for small caps. The selection of the “right” individual shares, the so-called stock-picking, is therefore of particular importance.
Since September 24, 2018, Deutsche Börse has listed the 70 largest German small caps in the SDAX. Previously, only 50 small caps were represented in the index. As a rule, the small-cap index increases faster than the DAX in rising markets, and the opposite is true in falling markets.
With an ETF, investors can invest almost directly in the SDAX. In addition, investors can make targeted investments in small caps with selected investment funds and products. In recent years, the DWS German Small/Mid Cap LD and the Lupus alpha Smaller German Champions have landed on the podium. Both performed better than the SDAX.
However, investors posted the highest gains with the Value Stars Germany index certificate, which has increased by a total of 248.2% since it was launched at the end of 2013 (as of December 31, 2021) and is also clearly ahead in a comparison of the last six years. This investment can be traded under the ISIN DE000LS8VSD9 via the Stuttgart Stock Exchange or in direct trading via Lang & Schwarz. on www.value-stars.de4 Interested parties will find comprehensive information on this investment.