Core Insights - Investors have historically favored small-cap stocks for their growth potential and portfolio diversification, but recent performance has been disappointing compared to large-cap stocks [1] Performance Comparison - Over the three years ending November 11, the Russell 2000 and S&P SmallCap 600 indexes returned 42.1% and 31% respectively, significantly underperforming U.S. large-cap stocks [2] - The WisdomTree International SmallCap Dividend Fund (DLS) achieved a return of nearly 66% during the same period, outperforming U.S. small-cap benchmarks [3] Valuation and Growth - International small-cap ETFs, including DLS, are trading at an average of 12x forward earnings, compared to 15x for larger peers and 27x for U.S. large stocks, while also growing earnings at a faster pace [5] - The asset class remains attractively valued despite recent bullishness among ex-U.S. small stocks [4] Market Exposure - DLS offers a favorable geographic mix, with Japan representing 26.35% of its holdings, which is beneficial given the positive outlook for Japanese small-caps [8][9] - International small-cap funds have greater allocations to sectors like industrials (15% overweight), materials (11%), and real estate (6%), while having less exposure to technology and communications compared to U.S. large-cap funds [7] Analyst Coverage and Institutional Ownership - Ex-U.S. small-caps are not as widely followed by analysts or heavily owned by institutional investors compared to international large-caps, presenting potential investment opportunities [6]