The iShares MSCI EAFE Small-Cap ETF (SCZ) is making headlines, hitting a fresh 52-week high of $65.60 during day trading on Wednesday. This milestone caps a positive year for the ETF, which has risen by 6.33% year-to-date and a decent 12.84% over the past year.
What’s Powering The Performance?
SCZ, which tracks the MSCI EAFE Small Cap Index, is benefiting from the strong performance of small-cap stocks in developed markets outside of North America. This ETF, with a 0.4% expense ratio and $9.42 billion in assets under management (AUM), offers exposure to small-cap companies across Europe, Australasia, and the Far East. The fund’s diversified portfolio, with its top 15 holdings, drives its success and contributes to its upward momentum.
Leading the charge are companies like Zealand Pharma A/S ZLDPF (0.32% of assets) and Marks and Spencer Group plc MAKSF (0.31% of assets), both of which have seen positive developments recently. These companies, along with others like DS Smith Plc DITHF and Addtech AB ADDHY, are helping to drive SCZ’s robust performance. As interest in small-cap stocks continues to grow, investors may want to keep an eye on events like the upcoming Benzinga SmallCAP Conference, where industry trends and investment opportunities in this space are often highlighted.
Regional & Sector Strength
Europe (50.81%) and Asia Pacific (48.5%) dominate the ETF’s regional exposure, with Japan (34.94%), the United Kingdom (14.59%), and Australia (9.28%) as the top three countries. This geographic diversification is proving advantageous as these regions continue to recover and grow in the post-pandemic economic landscape.
The Road Ahead
With the fund trading at a high, investors might wonder if there’s more room to grow. Technical charts indicate that the iShares MSCI EAFE Small-Cap ETF is exhibiting strong bullish momentum, with its share price currently above its five, 20 and 50-day exponential moving averages. The ETF has consistently stayed above key moving averages, including the eight-day simple moving average (SMA) at $63.79, the 20-day SMA at $62.91 and the 50-day SMA at $62.82, all signaling bullish momentum. With the 200-day SMA at $61.56, the ETF’s current price further confirms the ongoing upward trend.
Given its strong holdings and bullish trends in key regions, SCZ might continue to perform well. However, caution is warranted due to its recent rapid ascent.
