DDLS vs SCZ

DDLSCWisdomTree Dynamic International SmallCap Equity ETF

SCZAiShares MSCI EAFE Small-Cap ETF

In short

DDLS Most international small-cap funds pick a lane on currency: fully exposed or fully hedged. DDLS takes a third path, screening developed-market small caps outside the US and Canada for dividend payers, then moving its dollar hedge by rule.

SCZ The purist's take on foreign small caps: developed markets only, outside the US and Canada. Trading since 2007, SCZ follows the MSCI EAFE Small Cap Index, so Japan, Europe and Australia are in and emerging markets stay out.

Stated mandate

DDLS The fund seeks exposure to small-capitalization, dividend-paying companies in the industrialized world outside the United States and Canada, with dynamic hedging of applicable foreign-currency fluctuations against the U.S. dollar.

SCZ The fund seeks to track an index of small-cap equities from developed markets outside the United States and Canada, providing international diversification and exposure to overseas small-cap stocks.

Why people hold it

• DDLS The hedge is the point: a rules-based currency overlay that shifts with the dollar, not the fixed always-on or always-off setting most rivals hand you.wisdomtree.com
• Roughly 1,000 dividend-paying small caps across the industrialized world outside the US and Canada. Broad by design, and it distributes quarterly.
• Running since 2016, so the strategy has worked through several dollar up-and-down stretches rather than one convenient regime.
• Follows a named WisdomTree index rather than a manager's discretion, so the dividend screen and the hedge both operate on published rules.

• SCZ A clean, literal mandate: small companies in developed markets outside the US and Canada, with nothing else slipping into the basket.ishares.com
• It follows its stated index closely, one of the tighter implementations in the international small-cap group.
• Live since December 2007 and now a multi-billion-dollar fund that trades actively, the kind of scale that supports steady day-to-day liquidity.
• The 0.40% fee lands right at the median for its category, so the EAFE-specific screen doesn't carry a premium price.

Worth knowing

• DDLS At 0.48% it sits above the 0.40% category median, and far above plain-index peers like VSS and SCHC at 0.06%. The hedging machinery is not free.
• Thinly traded next to the category's household names, so execution deserves more attention than with the biggest index funds here.
• The hedge cuts both ways: it damps currency-driven losses and also gives up the tailwind a weakening dollar hands unhedged international funds.wisdomtree.com

• SCZ Median is not cheap here. VSS and SCHC charge 0.06% for their own ex-US small-cap baskets, several times less than SCZ's 0.40%.
• Developed markets only. Emerging-market small caps sit outside the mandate, unlike all-world peers such as VSS.
• The index is unhedged, so currency moves land on top of small-cap price swings, a bumpier ride than developed large-cap benchmarks.

Full DDLS profile⁠

Full SCZ profile⁠