American asset manager BlackRock has unveiled a new global equity small cap ETF that will invest in developed market small-cap companies.
The iShares MSCI World Small Cap UCITS ETF (WSML) will offer exposure to more than 4,000 firms in 23 developed markets. It will mainly focus on firms in real estate, industrials, as well as materials.
The ETF has a total expense ratio of 0.35% and constitutes nearly 14% of the free float-adjusted market capitalisation in every country.
BlackRock head of iShares EMEA product David Moroney said: “Global equities account for approximately USD70 trillion in assets, with almost 12 per cent covered by the developed small cap segment. Investors are increasingly diversifying their global equity allocation to include small-cap stocks, and they are using ETFs as a tool to do this in a cost-efficient manner.
“The macro environment is also encouraging investors to revisit their allocation to global small-caps. Acceleration in economic growth will benefit small cap stocks, as these companies tend to add to employment quicker and contribute to growth faster. At the same time, through their domestic focus, smaller companies tend to benefit from domestic growth policies and will be less impacted by future changes in global trade arrangements.”