Core Insights - The January Effect suggests that small-cap stocks may experience a rise at the beginning of the year after investors sell off losing stocks in the previous year to offset capital gains, leading to a potential boost when they repurchase shares in January [2] Small-Cap Stocks and ETFs - Small-cap stocks are known for their potential for outsized returns, albeit with higher risk compared to larger firms [3] - Small-cap exchange-traded funds (ETFs) are a popular investment vehicle to mitigate risks through diversification [3] - A seasonal ETF strategy may involve shifting towards small-cap funds at the start of the year to capitalize on potential momentum [3] Dimensional International Small Cap Value ETF (DISV) - DISV targets non-U.S. small-cap stocks from developed markets with comparably low prices and is actively managed to respond to market conditions [4] - The fund has an expense ratio of 0.42%, which is higher than many index-linked small-cap alternatives, but offers access to a curated portfolio of around 1,500 small-cap names globally [5] - DISV has returned nearly 47% year-to-date, significantly outperforming the S&P 500 and other inexpensive small-cap funds like the iShares Core S&P Small-Cap ETF, which is up less than 9% [6] Investment Considerations - In the new year, small-cap names may be positioned for growth based on seasonal investing patterns, with DISV and ISVL as two ETFs for broad small-cap exposure [7] - DFAU is mentioned as a counterbalance to these funds, providing a broad-based U.S. equities ETF option [7]