• What about the MSCI EAFE IMI? Even MSCI has recognized that the MSCI EAFE Index is not necessarily a “total market” exposure, largely missing out on the small-cap size segment. That’s one of the main reasons that the MSCI EAFE IMI has been gaining attention; it does in fact include large-, mid- and small-cap stocks, and it is broader than the MSCI EAFE Index.
– Even though the MSCI EAFE IMI has greater exposure to small caps than the MSCI EAFE Index, as seen by its -0.069 size factor loading, a WisdomTree blend of large cap, mid cap and small cap focused Indexes can match this size exposure while tilting significantly more weight toward mid- and small-cap stocks, specifically 43%. This is even true if we compare to the MSCI EAFE size-focused options, which stand at 19%. This is a big reason why we think the blend of 57% WT International LargeCap Dividend, 22% WT International MidCap Dividend and 21% WT International SmallCap Dividend Indexes delivered the second-best performance of the blends shown in this table, 5.34% average annual returns.
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Important Risks Related to this Article
Investments focusing on certain sectors and/or smaller companies increase their vulnerability to any single economic or regulatory development. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty.