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International exchange traded funds are an important asset class for retirement investors to consider. Stocks in various countries and regions around the world can and will perform differently than stocks based in the US. In the Broad Market Small/Mid Cap category, as compared to specific sectors or industries, we track four ETFs.

The SPDR S&P International Small Cap ETF (NYSEARCA:GWX), over the past year, led the way up in the Foreign Small and Mid Cap category with a gain of better than 20%. Their performance over the past year is in the following table:

Foregin Small/Mid Cap Equities

4/21/2011

Description

Symbol

1yr

3yr

Avg Volume K

1yr Sharpe

SPDR S&P International Small Cap

GWX

20.37%

1.00%

175

91.73%

iShares MSCI EAFE Small Cap

SCZ

18.21%

0.16%

291

73.47%

WisdomTree International Small

DLS

16.05%

-0.55%

25

66.27%

WisdomTree International MidCap

DIM

16.03%

-0.84%

6

65.61%

The largest country allocation in GWX is Japan at 25%. Industrials is its largest sector weighting at 23%.

These ETFs are well diversified with holdings from across the globe, and spread across the various business sectors. The Japan earthquake situation will probably have a minimal impact on these ETFs. Other ETFs that are focused exclusively on Japan will probably under-perform this year. This is a good example of when having diversified holdings pays off. Another advantage of these broad based international ETFs is currency diversification. Owning a basket of these stocks is like owning a basket of currencies from outside the US.

Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.