-
Asset Class: International Small Cap Value
-
Long-Term Performance: 5.47% CAGR
-
Correlation to U.S. Markets: 0.79
-
U.S. Large Cap Blend Performance (S&P 500): 10.62% CAGR
-
Back test timeframe: January 1995 – February 2022
-
Oldest ETF back tested: WisdomTree International SmallCap Dividend Fund (DLS)
-
Correlation to U.S. Stock Market: 0.86
-
Long-Term Performance: 5.23% CAGR
-
S&P 500 Performance: 10.33% CAGR
-
Back test timeframe: July 2006 – February 2022
-
Number of ETFs available in this asset class: 10
-
Number of ETFs in this asset class that are 10-years old or older: 4
International Ex-U.S Small Cap vs U.S. Large Cap Blend (aka S&P 500): January 1995 – February 2022
DLS vs SPY: July 2006 – February 2022
DLS vs SPY: June 16, 2006 – March 21, 2022
The Deep Value ETF Accumulator rankings for the 4 oldest Foreign Small / Mid Cap Value ETFs:
The 4 top ranked Foreign Small / Mid Cap Value ETFs head-to-head comparisons:
PDN vs DLS vs DIM vs FDTS: March 2012 – February 2022
PDN vs DLS vs DIM vs FDTS: February 16, 2012 – March 21, 2022
Stated objectives of the 4 top ranked Foreign Small / Mid Cap Value ETFs:
PDN – The Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (Fund) is based on the FTSE RAFI Developed ex U.S. Mid-Small 1500 Index (Index). The Fund will generally invest at least 90% of its total assets in securities that comprise the Index as well as American depositary receipts (ADRs) and global depositary receipts (GDRs) that represent securities in the Index. The Index is designed to track the performance of small and mid-capitalization equities of companies in developed international markets (excluding the US), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities are based on their fundamental strength and are weighted according to their fundamental scores. The Index is computed using the net return, which withholds applicable taxes for non-resident investors. The Fund and the Index are reconstituted annually.
DLS – WisdomTree International SmallCap Dividend Fund seeks to track the investment results of dividend-paying small-cap companies in the developed world ex the U.S. and Canada. Gain exposure to developed international world, ex-U.S. and Canada small cap equity from dividend paying companies. Use to complement or replace international developed small cap broad based active and passive strategies. Use to satisfy demand for income and growth potential.
DIM – WisdomTree International MidCap Dividend Fund seeks to track the investment results of dividend-paying mid-cap companies in the developed world ex the U.S. and Canada. Gain exposure to developed international world, ex-U.S. and Canada mid cap equity from dividend paying companies. Use to complement or replace international developed mid cap broad based active and passive strategies. Use to satisfy demand for growth potential and income focus.
FDTS – The First Trust Developed Markets ex-US Small Cap AlphaDEX® Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund’s fees and expenses, of an equity index called the NASDAQ AlphaDEX® Developed Markets Ex-US Small Cap Index. The NASDAQ AlphaDEX® Developed Markets Ex-US Small Cap Index is an “enhanced” index created and administered by Nasdaq, Inc. (“Nasdaq”) which employs the AlphaDEX® stock selection methodology to select stocks from the NASDAQ Developed Markets Ex-US Index that meet certain criteria. To construct the Index, Nasdaq ranks the eligible stocks on growth factors including 3-, 6- and 12- month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets. All stocks are ranked on the sum of ranks for the growth factors and, separately, all stocks are ranked on the sum of ranks for the value factors. A stock must have data for all growth and/or value factors to receive a rank for that style. Each stock receives the best style rank from the previous step as its selection score. The top 400 stocks based on the selection score determined in the previous step comprise the “selected stocks”. The selected stocks are divided into quintiles based on their rankings and the top ranked quintiles receive a higher weight within the index. The stocks are equally weighted within each quintile. Each stock is then tested in order of its selection score rank to check if the weight assigned to that stock is outside the country/sector weighting constraints, which are set at 15% above the benchmark weight. If the weight assigned to the stock, when added with the weight assigned to all higher ranking stocks in its country/sector, is greater than the constraint, then the stock’s weight is lowered to the highest rank in the next quintile. Stocks previously lower in rank then move up one rank. Such stocks in the lowest quintile that violate a constraint are removed from the portfolio and replaced by the highest scoring stock not originally selected, subject to country/sector constraints. This process continues until all the country/sector weightings meet the constraint. The index is reconstituted and rebalanced semi-annually.
Thank you for taking time to read this article. If you found it useful, please share it with a friend.
Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator
Previous Deep Value ETF Accumulator articles on Foreign Small / Mid Cap Value ETFs:
3 Best Long-Term Performance Foreign Small / Mid Value ETFs 1.4
Disclosure: We currently own shares of PDN, and we intend to buy more shares in the future. I am not a professional investment advisor. Please perform your own due diligence or seek the advice of a Registered Investment Advisor before investing in any security mentioned in this article. This website contains affiliate links to M1 Finance and Google AdSense.