Where do you actually find small-cap companies?
This post is drawn from The Little Book of Small-Caps by Cameron Oliver. Republished with permission.
Chapter One established what small-cap companies are and why they behave the way they do. This chapter answers the question that follows naturally from that: where do you actually go to find them?
The answer is not as simple as opening a dealing account and searching by market cap. Different exchanges attract different kinds of companies. Different markets carry different risks, different liquidity profiles and different cultural attitudes toward failure. The terrain matters as much as the territory.
The United States: scale above all else
If you are looking for small-cap stocks, the United States is the largest hunting ground on earth. American small-caps are mainly found on Nasdaq and the New York Stock Exchange, though thousands more sit on smaller platforms and over-the-counter markets. The Russell 2000 Index is the standard barometer, tracking 2,000 of these firms and serving as the benchmark most professional investors use when they talk about the sector.
What sets the US apart is not just scale but infrastructure. American markets offer deep liquidity and a dense network of venture capitalists, angel investors and specialist funds ready to write cheques. The domestic market of over 330 million people gives small companies room to grow before they need to look abroad. Add a regulatory environment tuned toward innovation and a culture that treats failure as a learning experience rather than a disgrace, and you have a powerful ecosystem.
Amazon, Microsoft, Moderna and Amgen were all once tiny companies with limited means and large ambitions. The US gave them the conditions to become what they are. That is not an accident.
The United Kingdom: ambition under pressure
Back on British soil, the Alternative Investment Market takes centre stage. AIM, launched by the London Stock Exchange in 1995, is the UK’s dedicated playground for small and medium-sized companies. At its peak it hosted over 1,600 listed names. That number has fallen significantly and continues to drop, as companies weigh the cost and scrutiny of public listing against the growing availability of private capital.
The FTSE SmallCap Index tracks smaller companies on the main London Stock Exchange market, offering a different profile from AIM: tighter regulation, greater liquidity, and less room for the speculative stories that give AIM its character.
UK investors can access both through trading platforms such as Hargreaves Lansdown, AJ Bell and Interactive Investor. The challenge is less about finding the companies and more about judging their staying power. AIM has its detractors. Listing costs, poor liquidity in many names and a history of companies that promised more than they delivered have all taken their toll. But it remains the most accessible route into early-stage British business for the ordinary investor.
The structural difficulty for British small-caps is worth understanding. The domestic market is not large enough to sustain rapid growth in the way the US market can. Companies are often pushed to scale internationally before they have fully stabilised at home. That is a harder climb, and it shows in the numbers.
Canada: resources and resilience
Head west across the Atlantic and Canada offers a resource-heavy lineup of small-cap opportunities. Most cluster around the Toronto Stock Exchange and its junior sibling, the TSX Venture Exchange, which specialises in emerging companies in mining, energy and health sciences. Below that sits the Canadian Securities Exchange, a more accessible market for micro-caps.
Canada’s small-cap scene moves with commodity cycles. When gold is rising or lithium is in demand, Canadian juniors are often the first to feel the lift. The country has deep geological expertise and a long history of financing resource exploration through public markets. This creates genuine opportunities, but it also creates a culture of promotion that rewards a compelling story over a proven one. Geological uncertainty is baked into the model.
Australia: mining meets momentum
Australia’s small-caps find a natural home on the Australian Securities Exchange, tracked by the S&P/ASX Small Ordinaries Index covering companies outside the top 100. Like Canada, the economy is rooted in resources, with mining companies spanning everything from rare earths to coal.
What gives Australian small-caps a different edge from their Canadian counterparts is geographic context. Australia’s proximity to Asia and its growing strength in technology sectors give its smaller companies access to markets that are growing fast. For investors looking at mineral-rich companies with exposure to booming regional demand, the ASX is worth understanding.
How UK investors can access all of this
You do not need to live in Toronto or Sydney to invest in international small-caps. Most UK brokers now offer international trading. IG, Interactive Brokers and AJ Bell, among others, provide access to American, Canadian and Australian exchanges.
For those who prefer not to pick individual stocks, exchange-traded funds offer a simpler route. The iShares Russell 2000 ETF gives broad exposure to the US small-cap market. The S&P/ASX Small Ordinaries ETF does the same for Australia. These funds spread risk across hundreds of names, letting you invest in the theme without needing to pick the winner.
American Depositary Receipts offer another option. Some foreign small-caps list ADRs on American exchanges, making them accessible via UK brokers. These instruments trade in US dollars and represent shares in non-US firms, often with simplified reporting.
For investors who want direct ownership of foreign equities, many UK platforms now support multi-currency accounts. The exchange rate risk is real, as are the foreign transaction fees, but for the right company the extra steps are worth it.
Choosing your arena
Every investor has preferences. Some are drawn to growth stories in emerging biotech. Others chase the cyclical swings of mining. Some want the familiarity of UK markets; others want the scale of the US.
The point is not to find the perfect market. It is to understand the one you are in. Each exchange has its own rules, its own culture and its own particular way of separating investors from their money if they are not paying attention.
The world of small-caps is vast. Opportunity exists on every continent. But like any good hunt, it starts with knowing the terrain.
Small Caps is a series drawn from first-hand experience of UK and global small-cap markets, updated as each new chapter arrives.
This post is drawn from The Little Book of Small-Caps by Cameron Oliver. Republished with permission.
This article is for informational purposes only and does not constitute financial advice. Investment values can go down as well as up. Always do your own research before making any financial decisions.