Over the long-term, mid-cap stocks historically outperform large-caps while being less volatile than small-caps.
PDN features exposure to 10 countries, all of which are developed markets. Japan is by far the ETF’s largest geographic allocation at 33.5%. The U.K., Canada and South Korea combine for about 24% of the fund’s roster.
As is the case with many ex-US developed market strategies, PDN is heavy on industrial and consumer discretionary stocks. Those sectors combine for almost 43% of the ETF’s weight. PDN, which turned 10 years old last month, has outperformed the MSCI EAFE Small Cap Index since coming to market.
For more on Smart Beta ETFs, visit the Smart Beta Channel home page.