August 01, 2007 at 4:00 pm by Tom Lydon
Barclays Global Investors filed papers with the SEC to launch three new small-cap international exchange traded funds (ETFs). The funds will track the recently-launched small-cap indexes from MSCI Barra, according to Matt Hougan for Index Universe. The funds are:
- iShares MSCI EAFE Small Cap Index Fund
- iShares MSCI EM Small Cap
- iShares MSCI Japan Small Cap
Previously, most investors looked to large-cap international ETFs to diversify their portfolios with international investments. However, the increase in globalization has caused too much similarity among international large-caps, Hougan says. The idea behind investing in international small-caps for better diversification is that they will vary greatly from one another by investing in local economies.
These new ETFs will face some competition as ETF providers State Street Global Advisors and WisdomTree already have some small-cap international ETFs on the market. For example, WisdomTree’s International Small Cap Dividend ETF (DLS) has more than $500 million in assets.
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