3 ETFs Giving Ready-Made Access to the Discounted International Small-Cap Space
The international small-cap equities space may be one of the most overlooked value prospects available to investors right now. In the last two years, the MSXI EAFE Small Cap Index—focused on developed nation small-cap stocks outside of the United States and Canada—has seen some of its lowest valuations relative to domestic large-cap names in decades.
International Small-Caps Offer Plenty of Perks
Market participants in the U.S., broadly speaking, already perceive international equities as being more volatile than domestic equivalents. They also believe that scenario is amplified with smaller stocks.
Quietly Big Outperformance With This Small-Caps ETF
Investors have long embraced small-caps. That's because of higher growth prospects and diversification within portfolios that often lean into large-caps.
DLS: An Ill-Timed Investment Even 20 Years On
The WisdomTree International SmallCap Dividend Fund ETF is not recommended for dividend income or price appreciation due to underperformance and better alternatives. The ETF deviates into mid-cap holdings, complicating its small-cap mandate, and has high turnover, adding unwanted costs. Small-cap companies struggle with high debt costs and liquidity issues, making DLS unsuitable in the current economic climate.
