SCZ Profile
The iShares MSCI EAFE Small-Cap ETF is designed to provide investors with exposure to small-cap stocks in developed markets outside the United States and Canada. Under normal market conditions, the fund allocates at least 80% of its assets to the securities that constitute the MSCI EAFE Small-Cap Index. This index captures the performance of small-capitalization companies across developed markets in Europe, Australasia, and the Far East, excluding the U.S. and Canada. The ETF aims to replicate the index’s performance by investing in a diversified portfolio of small-cap stocks from these regions.
The MSCI EAFE Small-Cap Index includes companies that are categorized as small-cap based on their market capitalization, which are typically smaller and may offer higher growth potential compared to their larger counterparts. The index covers a broad range of sectors and industries, providing a comprehensive representation of the small-cap segment within the MSCI EAFE universe. By tracking this index, the fund seeks to provide investors with diversified exposure to international small-cap equities and potential opportunities for growth in global markets.
The fund's strategy involves holding securities that closely mirror the economic characteristics of those in the index. This means that it invests not only in the actual index constituents but also in other securities with similar economic attributes. This approach ensures that the fund's performance aligns with that of the MSCI EAFE Small-Cap Index. The ETF uses a passive mavnagement strategy to achieve its investment objective, focusing on maintaining a portfolio that closely reflects the index's composition and weightings.
Investors should consider that the fund’s focus on small-cap international equities exposes them to specific risks, including market volatility and economic fluctuations in foreign markets. Small-cap stocks may experience higher price volatility compared to large-cap stocks, and investing in international markets introduces additional risks such as currency fluctuations and geopolitical instability. The fund offers a way to diversify exposure beyond the U.S. and Canadian markets, providing investors with the potential benefits of growth in smaller, established companies across developed international markets.
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