You may have seen small-cap stocks discussed as a great source of investment ideas if you're looking for the big winners of the future. I'm also intrigued by their potential to help you invest amid an uncertain world economy. While smaller companies can be riskier because they lack the resources of large global operations, they're also more insulated from global economic conditions. Think of a small bank operating in a few states, versus a corporation like Bank of America that has operations all over the world. This insulation helps make small-caps a good idea for any portfolio.

While you could research a few small-cap stocks to invest in, the diversity of an exchange-traded fund, or ETF, is well worth examining if you're just getting started. Let's look at a few.

The growth of the broader market

While growth focused funds carry more risk, they also higher potential returns. The iShares Russell 2000 Growth ETF (NYSEMKT:IWO) aims to track the Russell 2000, providing exposure to the small-cap markets. This is an ideal play for 2020 if you believe that the current economic cycle can keep going.

While small caps have been relatively weak compared to large caps in more recent history, this also sets up the area for more potential. The ETF has averaged a compound annual growth rate (CAGR) of roughly 13.7% over the past 10 years. That beats the S&P 500, as well as a lot of small-cap options. Again, a growth-oriented fund like this does carry more inherent risk, but the fund has a cheap expense ratio of 0.24. Acknowledging the constant concerns and predictions about the economy and recessions, this doesn't need to be a large portion of your portfolio, but avoiding exposure to the potential rebound in small-cap growth seems self-limiting.

Hand lining up dice reading "ETF" and an up arrow

Image source: Getty Images.

A more conservative approach

Flipping to the opposite end of the spectrum, the Invesco S&P Small-cap Low Volatility ETF (NYSEMKT:XSLV) rests at a low risk range on Morningstar's ratings, while still offering a nice history of returns. The fund tracks the results of the S&P SmallCap 600 Low Volatility Index. It holds the securities with the lowest volatility over the course of a year. About 33% of the ETF is in financial services, an area I like because credit markets are always in demand for every industry. Love them or hate them, banks and lenders are here to stay. And 37% rests in real estate, including mortgage companies and real estate investment trusts (REITs).

As a whole, the ETF has grown at almost 13% per year since inception, currently offering an annual dividend yield of 2.4%. Garnering a 5-star Morningstar rating, the low-risk nature of this ETF is a counteract to the iShares Russell 2000 Growth ETF.

Average risk, above-average returns

The Schwab US Small-Cap ETF (NYSEMKT:SCHA) tracks the small-cap holdings of the Dow Jones U.S. Total Stock Market Index. A cheap expense ratio of 0.4, along with a 10-year compounded growth rate of almost 12.7%, make the ETF an appealing play as an exposure to domestic small-caps. If you're a believer in diversification, this small blend provides it. Allocation includes 17% in financials, 14% in healthcare, and 16% in industrials. It also carries a dividend yielding 1.39%.

This is sort of a middle-of-the-road ETF. It is a neither overly conservative nor overly aggressive holding. You aren't overly exposed to the risks of a growth fund, but you still aim at a little more than a more cautious play.

The value play

The Vanguard Small-Cap Value Index Fund ETF (NYSEMKT:VBR) looks to follow the CRSP U.S. Small Cap Value Index. It may be conservative. It may not carry the excitement of a growth fund. What it does have is a decent average annual return of 8.5% since its inception in 2004. Over the past 10 years, that average has been up to 12%. Currently carrying a dividend of 2%, and a low expense ratio of 0.07, the ETF carries a five-star rating from Morningstar, with a low overall risk rating.

Something like this would balance out the risk of some of the funds I've mentioned previously. The value focused nature gives you exposure to the small-cap area, while hedging against the effect that a downturn in the domestic economy would have on small-cap companies.