International Small-Cap Value Equity

International small-cap value mutual funds and ETFs invest in small-cap stocks deemed... International small-cap value mutual funds and ETFs invest in small-cap stocks deemed to be undervalued on a fundamental basis. A portfolio manager can deem a company to be undervalued based on current factors such as book value, earnings per share, revenue, or free cash flow. Value investing is the opposite of growth investing, which seeks to own companies that may exhibit faster growth than the market average. Value investing can also be beneficial if a company pays out healthy dividend yields, which can increase an investor’s total return. Value stocks tend to trade at lower valuations (price-earnings ratios, for example), than growth stocks. A defining feature of small-cap stocks is that they usually have a market capitalization under US$1 billion. Some international small-cap value ETFs and mutual funds invest solely in smaller companies, although some portfolios invest in stocks of all sizes, but retain a small-cap profile for the overall fund. On one hand, value companies can be good investments if they continue to exhibit solid financial performance, or turn around struggling parts of their business. On the other hand, a value stock that loses market share or bleeds cash may significantly decline in price. Funds focused on international small-cap value companies typically have a large concentration in the basic materials , financial services, and consumer sectors. International small-cap value mutual funds and ETFs are usually appropriate for more aggressive investors who aim to generate high returns and are comfortable with high levels of volatility. It should be noted that small-cap value stocks do tend to exhibit more volatility than mid and large-cap value stocks. Additionally, investors should be aware of risks associated with these funds, including currency fluctuations and unfavorable geopolitical environment. Last Updated: 12/24/2024 View more View less

International small-cap value mutual funds and ETFs invest in small-cap stocks deemed to be undervalued on a fundamental basis. A portfolio manager can deem a company to be undervalued based on current factors... International small-cap value mutual funds and ETFs invest in small-cap stocks deemed to be undervalued on a fundamental basis. A portfolio manager can deem a company to be undervalued based on current factors such as book value, earnings per share, revenue, or free cash flow. Value investing is the opposite of growth investing, which seeks to own companies that may exhibit faster growth than the market average. Value investing can also be beneficial if a company pays out healthy dividend yields, which can increase an investor’s total return. Value stocks tend to trade at lower valuations (price-earnings ratios, for example), than growth stocks. A defining feature of small-cap stocks is that they usually have a market capitalization under US$1 billion. Some international small-cap value ETFs and mutual funds invest solely in smaller companies, although some portfolios invest in stocks of all sizes, but retain a small-cap profile for the overall fund. On one hand, value companies can be good investments if they continue to exhibit solid financial performance, or turn around struggling parts of their business. On the other hand, a value stock that loses market share or bleeds cash may significantly decline in price. Funds focused on international small-cap value companies typically have a large concentration in the basic materials , financial services, and consumer sectors. International small-cap value mutual funds and ETFs are usually appropriate for more aggressive investors who aim to generate high returns and are comfortable with high levels of volatility. It should be noted that small-cap value stocks do tend to exhibit more volatility than mid and large-cap value stocks. Additionally, investors should be aware of risks associated with these funds, including currency fluctuations and unfavorable geopolitical environment. Last Updated: 12/24/2024 View more View less