This is a passive ETF that tracks an index of small-cap value stocks in developed markets outside the US. It selects international developed-market small companies with strong value metrics, reflecting a value tilt while giving exposure to the growth potential of small caps.

It suits investors who want to invest in international developed-market small-cap value stocks and can tolerate the volatility and currency risk that come with small caps and overseas markets.

It is a passive (index-tracking) ETF managed by iShares.

The fund tracks an index that selects stocks with strong value metrics from among small caps in developed markets outside the US and reflects a value factor. Unlike market-cap weighting, it tilts toward undervalued stocks, giving it a rules-based structure that concentrates on value stocks within international developed-market small caps.

• Selection of international developed-market small-cap value stocks
• Value factor tilt

Assets under management (AUM) are $327.9M, and the total expense ratio (Expense Ratio) is 0.31% per year.

Compared with a plain international small-cap ETF or an international large-cap value ETF, the main point of comparison is the combination of small-cap and value.

International developed-market small-cap value stocks are driven by global risk appetite, exchange rates, economic conditions in each country and style rotation. Value strategies tend to be strong when value stocks are in favor and weak when growth stocks lead. The combination of small-cap and overseas characteristics makes volatility relatively high.

Fund flows into international small-cap value stocks split depending on global risk appetite, currency movements and style rotation, and money sometimes shifts toward related products when interest in value investing rises. It is also worth noting that performance varies with each country's economy and currency variables.

Exposure to international small-cap value is its strength, while small-cap and overseas volatility, weakness during growth-led markets and currency effects are factors to consider.

For international small-cap exposure without a value tilt, direct alternatives include SCZ, and GWX is another product to compare for different international small-cap exposure. Investors seeking international small-cap dividend stocks can also consider products such as DLS. The three products shown in the table, AVDV, DISV and EFV, follow international small-cap value and international large-cap value strategies, and differ in market-cap range and in how they reflect value. This ETF is differentiated by combining a value factor with international developed-market small caps.

Here are the points to review before investing in ISVL. Exposure to international small-cap value is attractive, but small-cap and overseas volatility, weakness during growth-led markets and currency effects should be checked in advance. It is also worth comparing it with plain international small-cap and international large-cap value products.

Economic slowdowns in individual countries, currency swings and relative weakness when growth stocks lead are the main variables for long-term performance, and the combination of small-cap and overseas characteristics makes volatility high. Drawdowns can be large during periods of weakness in international small caps.

This is a suitable candidate for investors who want to invest in international developed-market small-cap value stocks. If you want international small caps without a value tilt, compare products such as SCZ and GWX, and if you want international small-cap value exposure, compare them with this product before choosing.