The Australian Small Cap ETF Investors Should Be Watching

By The ETF Professor Aug 11, 2010 12:15 pm

Australian small-caps have outperformed large-caps in three of the past five years, suggesting KROO could have a long life ahead.

Comment

Editor's Note: This content was originally published on Benzinga.com.

Plenty of country-specific small-cap ETFs have been coming to market lately, but not all of them involve emerging markets. The folks at Index IQ have seen to that by introducing small-cap ETFs tracking Australia and Canada.

The IQ Australia Small Cap ETF (KROO) has more than just a cute ticker. KROO does a good job of representing Australia's economy, devoting more than 39% of its sector allocation to materials stocks.

That does hamper sector diversity as consumer discretionary and industrial names are the only sectors to receive double-digit weights.

In KROO's favor, the ETF doesn't focus on truly speculative small-cap names as the average market cap of KROO's holdings is over $1.6 billion.

Since coming to market on March 23, KROO has slipped by about 5%, but Australian small-caps have outperformed large-caps in three of the past five years. That's not a guarantee the feat will be repeated this year, but that statistic does say KROO should have a long life and be worth a look in overt bull markets.

KROO holds 99 stocks and has an expense ratio of 0.69%. The ETF tracks the IQ Australia Small Cap Index.

For more on ETFs take a FREE 14 day trial to the Grail ETF & Equity Investor newsletter. Receive specific trades and strategies across many sectors. Learn more.

Below, find some more great ETF and market content from Benzinga:

Five Currency ETFs for Rising Rates and Economies

It Is Time to Look North for Oil (SU, CNQ, CVE)

Beware the Far-Reaching Nature of Fin-Reg (XOM, MUR, APC)