Related: Bond ETF Investors & Active Strategies Ahead
It is important to note that despite 2017’s surge in global small cap stocks, all major regions still boast higher dividend yields and lower earnings multiples than U.S. small caps:
Finally, foreign small cap stocks have offered investors better diversification benefits than foreign large caps, which is critical in a time of somewhat elevated correlations across the globe.
As the global economy continues to improve, a combination of an improved earnings outlook and favorable valuations should continue to boost the case for exposure to foreign small caps.
This article has been republished with permission from Fortune Financial Advisors.