WisdomTree International SmallCap Dividend Fund

DLS

Market cap $1.04B

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-cap value and dividend strategies have quietly become two of the better-performing corners of global equity markets, and the two most popular vehicles to capture them are the Avantis International Small Cap Value ETF (NYSEARCA:AVDV) and the WisdomTree International SmallCap Dividend Fund (NYSEARCA:DLS).

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.

The S&P 500 is easy for investors to access, but it's dominated by large-cap U.S. companies. An ideal complement to these holdings is the WisdomTree International SmallCap Dividend Fund.

Investors have long embraced small-caps. That's because of higher growth prospects and diversification within portfolios that often lean into large-caps.

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.

By Liqian Ren, Director of Modern Alpha Key Takeaways Currency hedging is crucial for mitigating risks in global investing by managing foreign exchange fluctuations while preserving equity exposure. Our dynamic currency-hedged ETFs have proven to reduce portfolio risk through factor-based strategies.