The international small equity space may be one of the most overlooked value prospects available to investors right now. Over the past two years, the MSXI EAFE Small Cap Index—which focuses on developed nation stocks outside of the United States and Canada—has seen one of its lowest valuations relative to large domestic names in decades. At the same time, developed market shares in the United States have quietly improved and outperformed the US market in recent quarters.
The combination means that investors may still have an opportunity to catch small international equity firms before they lose their value appeal and while there is still momentum to ride. Of course, many retail investors will not consider these names or may not even recognize them, due to their lack of name recognition in the United States. However, a group of exchange-traded funds (ETFs) can add diversification to various international sub-caps in different portfolios.
A Deep Basket of Internationally Developed Names for Industry and Geographical Diversity
Company rating SPDR S&P International Small Cap ETF NYSEARCA: GWX tracks an index of non-US companies with a market capitalization between $100 billion and $2 billion. Focusing on stocks from developed countries, Japan, South Korea, Canada, and Australia are at the top of the list. The fund’s largest allocation is to industrial names at about 22%, followed by information technology, materials, and consumer discretionary stocks.
SPDR S&P International Small Cap ETF today
SPDR S&P International Small Cap ETF
As of 06/12/2026 04:10 PM Eastern
- 52 week interval
- $35.36
▼
$47.28
- Dividend Yield
- 2.51%
- Assets Under Administration
- $869.19 million
GWX’s appeal lies in its broad exposure to international stocks outside the traditional mega-cap space. By targeting firms outside popular sectors among investors looking for international shares (energy, finance), GWX can help balance exposure to foreign countries or rely on domestic positions.
The most diversified basket includes more than 2,000 different stocks, with no holdings representing about three percent of the portfolio. Along with that range, GWX also offers a solid dividend yield of 2.5% as another way to attract investors.
With a 1-year return of 25%, an average expense ratio of 0.40% could be justified, even if GWX was slow to break even in 2026, based on roughly 12% year-to-date (YTD) returns.
The best PDN exchange
Targeting the same area of stocks as GWX but with a focus on companies based on book value, cash flow, sales, and dividends, the Invesco RAFI Developed Markets ex-US Small-Mid ETF NYSEARCA: PDN it comes less expensive than its competitor. PDN’s expense ratio of 0.47% is higher than GWX, but the potential benefits of a portfolio constructed using these other factors instead of market capitalization ratios may make the additional expense worthwhile.
Invesco RAFI Developed Markets ex-US Small-Mid ETF Today
Invesco RAFI Developed Markets ex-US Small-Mid ETF
As of 06/12/2026 04:10 PM Eastern
- 52 week interval
- $37.22
▼
$47.72
- Dividend Yield
- 3.07%
- Assets Under Administration
- $354.35 million
In terms of performance over the past year, however, PDN is almost on par with GWX with roughly a 20% return over the past year and 10% YTD. Its portfolio is also relatively small, with about 1,600 positions that lean heavily on industrials, financials, and commodity stocks from Japan, Canada, South Korea, and the UK, among others.
Another area where PDN really shines, however, is its distribution. The fund offers a dividend yield of 3.1%, which some investors may feel more than makes up for its recent slow performance relative to a rival like GWX.
Trading a Modest Return for a Strong Dividend Yield
Investors with a particular interest in paying small dividends may consider the WisdomTree International SmallCap Dividend ETF. NYSEARCA: DLSfocusing on developed markets outside of the United States and Canada. While small-cap names aren’t known for paying dividends, a fund like DLS that focuses on those that distribute can help investors balance growth and income.
WisdomTree International SmallCap Dividend Fund today
WisdomTree International SmallCap Dividend Fund
As of 06/12/2026 04:10 PM Eastern
- 52 week interval
- $72.67
▼
$89.37
- Dividend Yield
- 3.46%
- Assets Under Administration
- $1.05 billion
Although DLS has the smallest portfolio of the three funds here, with more than 1,000 assets it is still broad enough for most investors. And while DLS comes in with the least impressive performance of the three ETFs, returning nearly 7% YTD and 17% over the past 12 months, its 3.5% yield is also very strong.
For investors, the appeal of DLS may be that it creates a dividend play on stocks that are often not available in other equity strategies, due to their size and international nature. This can help not only increase income but also help protect a dividend-oriented portfolio through its diversification.
On the other hand, investors will have to pay a premium for this option, as DLS comes with an annual fee of 0.58%.
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