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International Small-Cap ETFs


Yesterday we examined primarily U.S. Small-Cap Equity ETFs in the landscape and today we will take a closer look at Small- Caps that are internationally focused.

The largest product in this sub-space is SCZ (iShares MSCI EAFE Small Cap, Expense Ratio 0.40%) with $2.7 billion in assets under management.

This fund is followed by DGS (WisdomTree Emerging Markets SmallCap Dividend, Expense Ratio 0.64%), VSS (Vanguard FTSE All World ex-U.S. Small Cap, Expense Ratio 0.25%) in terms of fund size as these two have $1.7 billion and $1.56 in assets under management respectively.

SPDRs is also a player in this space, offering GWX (SPDR S&P International Small Cap, Expense Ratio 0.59%) and EWX (SPDR S&P Emerging Markets Small Cap, Expense Ratio 0.65%) and two other notables are DLS (WisdomTree International SmallCap Dividend, Expense Ratio 0.58%) and SCHC (Schwab International Small Cap Equity, Expense Ratio 0.20%) in terms of total fund sizes as measured by AUM.

Like the U.S. Equity based small cap ETFs in 2013, the trend of strong price performance among internationally based Small Caps has garnered notable asset inflows, as SCZ for example has picked up $732 million in new assets just year to date while DGS has added $563 million, VSS has reeled in $326 million, DLS has attracted $103 million, and SCHC has added $59 million.

Trading the international small cap space can be much trickier than trading say the likes of large cap oriented EFA (iShares MSCI EAFE, Expense Ratio 0.34%) and EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%), as published liquidity even in the largest funds in the space like an SCZ can often be scarce (perhaps several hundred shares in the quote visually up a few levels) and bid/ask spreads will often tend to be wider than the mainstream large cap ETFs.

Due to the nature of the underlying securities being small-caps and harder to trade in their own right, these additional costs of entry and exit in trading should be expected as part of the cost of doing business when getting exposure to the international small caps.

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

Street One Financial is an educational/research firm utilizing the Broker Dealer services of GWM Group Inc (RLCC) a FINRA registered Broker/Dealer. All trades are executed through GWM Group (RLCC) and cleared by Fidelity (NFS)DTC number 0226. Street One Financial LLC makes available products and services offered by GWM Group Inc., a registered broker-dealer and Member Securities Investor Protection Corporation (SIPC), Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.