This ETF holds small-cap stocks in developed markets outside the US that show pronounced value characteristics. Rather than tracking a specific index, it builds a broad universe using the manager's own criteria and holds the stocks in proportion to market capitalization.

It suits long-term diversified investors who want to add international small-cap value exposure to a portfolio built mainly around US large caps.

It is an actively managed ETF run by Dimensional.

The fund builds its universe around small caps whose market price is low relative to book value, and it also looks at profitability measures to screen out weaker companies. It holds a large number of stocks to absorb company-specific risk, and instead of concentrating trades on fixed dates, it spreads them out on an ongoing basis.

• A rules-based active structure that uses proprietary selection criteria rather than replicating an index
• A diversified sector mix across industrials, financials, materials and consumer discretionary
• A continuous adjustment approach that avoids the trading costs of clustering trades on rebalancing dates

Assets under management (AUM) are $5.1B, and the expense ratio is an annual 0.42%.

Trading volume is thinner than for ETFs that track major US indexes, so it is wise to check the bid-ask spread when buying or selling.

The fund has tended to rise alongside developed-market value stocks overseas during periods of broad strength. However, because of its heavy small-cap weighting, it tends to fall more sharply than large-cap indexes when investors turn risk averse.

As asset allocation demand aimed at reducing US concentration shifts toward international value products, money has been flowing in steadily. The strength of the dollar and the direction of interest rates in developed markets have a large influence on performance.

Its strength is that it broadly covers the narrow niche of international small-cap value, while volatility and currency exposure are the burdens.

The AVDV ETF shown in the table targets the same international small-cap value segment and is a close, direct substitute. The EFV(ETF) and the IVLU ETF focus on large caps, so even with the same value theme, they sit in a different market-cap range. The JIVE ETF is worth comparing in terms of fees and fund size. Outside the table, placing it alongside the VXUS for broad international exposure, the SCHC covering developed-market small caps in general, and the SCZ with a weaker value tilt makes the differences in character clearer.

Here are the items to check before buying. International small-cap value is a segment with a distinct character, so you should first decide what role it will play within your account. Setting your position size and holding period in advance helps you stay steady when volatility rises.

Because small-cap and value styles overlap, declines show up sooner and run deeper when the market is shaken. Without a currency hedge, there are also periods when currency moves drive performance.

It is worth considering as a satellite holding to reduce US concentration. If size and ease of trading come first, compare it with AVDV and similar products, and if you want large-cap value exposure, take a look at EFV and others as well.