Like U.S. small-cap ETFs, GWX offers a domestic focus relevant to the fund’s member countries. That positions the fund to benefit from increasing consumer sentiment and improving fiscal conditions.

“However, smaller firms with a greater percentage of domestic sales may stand to benefit, both from an uptick in local demand for their products and services and from new policies that could reduce costs,” notes State Street. “Small-cap companies are also much less likely to be caught in the crossfire of protectionism, as their average foreign sales exposure is less than that of large caps.”

GWX allocates over 35% of its combined weight to industrial and consumer discretionary stocks.

For more information on European markets, visit our Europe category.