Much of the ETF talk in recent days has been concentrated on U.S. Small Cap stocks given the sharp and sudden reversal of the Russell 2000 Index off its recent highs, but today we switch the focus to their International counterparts.
The largest International Small Cap ETF in the marketplace is SCZ (iShares MSCI EAFE Small Cap, Expense Ratio 0.40%), which since its 2007 inception has raised an impressive $4.1 billion in assets.
Holding 1,515 individual securities currently, the fund is very well diversified in that it’s top holding still only has a 0.38% weighting (Symrise AG), followed by Ashtead Group PLC (0.37%). It is safe to say that if one looked at the top holdings of this fund, none of these names jump out as immediately recognizable, given their small-cap and internationally based nature.
The fund leans the heaviest in Europe, where 44% of the holdings are based, followed by exposures to Japan (26.69%), Australia (7.41%), Developed Asia (4.57%), and smaller weightings to the Middle East, Emerging Asia, and Latin America.
Vanguard has a strong competitor in this space as well in VSS (Vanguard FTSE All-World ex-U.S. Small Cap, Expense Ratio 0.20%). This fund came to market in 2009 and holds a whopping 3,216 individual securities that are internationally based. Similar to SCZ, it is not top heavy either, as the number one weighted name in the fund, TOU, only has a 0.39% weighting, followed by GIL with a 0.30% weighting.
VSS currently has an asset base of $2.1 billion. GWX (SPDR S&P International SmallCap, Expense Ratio 0.59%) has become reasonably well known lately thanks to asset growth over time ($875 million in AUM currently) and it is the third largest fund in the space.