SCZ vs VSS

SCZAiShares MSCI EAFE Small-Cap ETF

VSSAVanguard FTSE All-World ex-US Small-Cap ETF

In short

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.

VSS One ticker for the small companies the rest of the world runs on: roughly 4,800 stocks across developed and emerging markets outside the US, at 0.06% a year. Vanguard has run it since 2009.

Stated mandate

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.

VSS Seeks to track the FTSE Global Small Cap ex US Index, providing broad exposure to developed and emerging non-U.S. small-cap equity markets worldwide through passive index sampling.

Why people hold it

• 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.

• VSS 0.06% a year, against a roughly 0.40% median for international small-cap funds. Only Schwab's SCHC matches the price.
• Developed and emerging markets in the same basket, roughly 4,800 names deep, so no single country or company carries much of the load.
• Tracks its FTSE Global Small Cap ex US benchmark closely and trades tightly for a fund built on thousands of overseas small caps.
• Running since 2009, now a multi-billion-dollar fund that pays out quarterly. Long track record, deep plumbing.vanguard.com

Worth knowing

• 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.

• VSS Small caps abroad move harder than blue chips, and everything is priced back into dollars, so currency swings ride along.vanguard.com
• Vanguard samples the index rather than buying every line item, so the portfolio approximates the benchmark instead of replicating it.vanguard.com
• Coverage stops at the US border by design. American small caps sit entirely outside the mandate.

Full SCZ profile⁠

Full VSS profile⁠