SPDR® S&P International Small Cap ETF (GWX)

US ETF SPDR® S&P International Small Cap ETF (IJR) Overview

Profile:

Target Sector: International Developed Markets (ex-US) Small Cap Stocks Investment Strategy: Passively tracks the S&P International SmallCap 600 Index, which comprises 600 small-cap companies from 26 developed markets outside the United States.

Objective:

The primary investment goal of IJR is to provide investors with exposure to the performance of the international small-cap equity market, aiming to replicate the total return performance of the underlying index, net of expenses.

Issuer:

State Street Global Advisors (SSGA)

Reputation and Reliability: SSGA is a leading asset manager with a long and established track record, managing over $4 trillion in assets. It is known for its expertise in index tracking and ETF management.

Management: The ETF is managed by a team of experienced portfolio managers who have extensive knowledge of international small-cap markets.

Market Share:

IJR is the largest and most liquid ETF in the international small-cap equity space, with a market share of over 80%.

Total Net Assets:

As of October 26, 2023, IJR has approximately $24.7 billion in total net assets.

Moat:

• Liquidity: High trading volume and tight bid-ask spread make IJR a very liquid ETF, minimizing trading costs.
• Low Expense Ratio: The expense ratio of 0.35% is highly competitive compared to other international small-cap ETFs.
• Diversification: IJR provides exposure to a broad range of small-cap companies across different sectors and countries, reducing individual company risk.

Financial Performance:

• Historically: Since inception in 2000, IJR has delivered an annualized return of 8.36%.
• Benchmark Comparison: IJR has consistently outperformed its benchmark, the S&P International SmallCap 600 Index, over various timeframes.

Growth Trajectory:

International small-cap equities are expected to experience healthy growth due to favorable economic fundamentals in developed markets and increasing investor demand for diversification.

Liquidity:

• Average Trading Volume: IJR trades over 20 million shares per day, indicating high liquidity.
• Bid-Ask Spread: The average bid-ask spread is tight, typically around 0.02%, highlighting low trading costs.

Market Dynamics:

• Economic Growth: The performance of IJR is influenced by the economic growth of developed markets outside the US.
• Investor Sentiment: Risk appetite and global market sentiment impact investor demand for small-cap stocks.
• Currency Fluctuations: IJR is exposed to currency fluctuations, which can impact its returns.

Competitors:

• iShares MSCI EAFE Small-Cap ETF (SCZ)
• Vanguard FTSE Developed Markets Small-Cap ETF (VWO)

Expense Ratio:

The expense ratio of IJR is 0.35%.

Investment Approach and Strategy:

• Strategy: IJR tracks the S&P International SmallCap 600 Index, investing in the same proportions as the index constituents.
• Composition: IJR holds a diversified portfolio of small-cap stocks across various sectors, including financials, industrials, and consumer discretionary.

Key Points:

• Largest and most liquid international small-cap ETF.
• Low expense ratio and tight bid-ask spread.
• Tracks a broad and diversified index.
• Historically outperformed its benchmark.

Risks:

• Market Volatility: IJR is subject to market volatility, particularly in small-cap stocks.
• Currency Risk: Fluctuations in foreign currencies can impact returns.
• Emerging Market Risk: Some index constituents are located in emerging markets, which may carry higher risks.

Who Should Consider Investing:

• Investors seeking international small-cap exposure.
• Investors looking for diversification in their portfolio.
• Investors comfortable with higher volatility.

Fundamental Rating Based on AI: 8/10

IJR receives a strong rating based on its robust fundamentals, including its size, liquidity, low expense ratio, and consistent outperformance. However, investors should consider their risk tolerance and investment goals before investing.

Resources and Disclaimers:

Resources:

• SPDR® S&P International SmallCap ETF (IJR): https://www.spdrfunds.com/us/en/etfs/product/ijr
• BlackRock iShares MSCI EAFE Small-Cap ETF: https://www.ishares.com/us/products/239641/ishares-msci-eafe-small-cap-etf
• Vanguard FTSE Developed Markets Small-Cap ETF: https://investor.vanguard.com/etf/profile/portfolio/vwo

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a licensed financial advisor before making any investment decisions.