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Exchange-traded fund investors now have more international small cap ETF options but all of them share one major drawback, an overemphasis on Japan and the UK. I would love to see a small cap oriented ETF that included emerging markets and challenged the indexes in a more dramatic way.

Tom Lydon of ETF Trends summarizes your small cap international ETF choices this way.

iShares MSCI EAFE Small-Cap (NYSEARCA:SCZ) launched last week and has an expense ratio 0.40%. Industrials make up 23.5% of the ETF, followed by financials at 20.7% and consumer discretionary at 16.1%. Top countries represented are Japan at 24.8%, the U.K. at 19.8% and Australia at 8.9%.

iShares FTSE Developed ex-U.S. Small-Cap (IFSM) began trading last month with an expense ratio 0.50%. Top sectors represented in this ETF include industrials at 28.5%, financials at 22.4% and consumer services at 12.9%. The U.K. makes up 24.1% of the ETF, followed by Japan at 15.9% and France with 6.1%.

PowerShares FTSE RAFI Developed ex-U.S. Small-Mid (NYSEARCA:PDN) hit the market in September with an expense ratio of 0.75%. Consumer discretionary makes up 18.3% of this ETF, while consumer staples is 9.4% and energy is 3.8%. Japan is the top country represented with 34.4%, the U.K. is 11.9% and Hong Kong makes up 7.0%. PDN also includes mid-cap companies.

SPDR S&P International Small-Cap (NYSEARCA:GWX) launched earlier this year in April and has an expense ratio of 0.60%. GWX consists of industrials at 25.8%, consumer discretionary at 19.4% and financials at 16.9%. Japan is again the top weighted country at 24.0%, followed by the U.K. at 12.0% and Canada at 10.9%.

WisdomTree International Small-Cap Dividend Fund (NYSEARCA:DLS) was the first to launch in June 2006. It has an expense ratio of 0.58%. The top sectors are industrials at 25.3%, consumer non-cyclical at 18.1% and financials at 17.8%. Japan's weight in DLS is 22.6%, Australia follows with 18.5% and then the U.K. at 18.3%.

You can see that it is difficult to avoid this Japan/UK dominance. The SPDR ETF has the least exposure to Japan and the UK at 36% and the Wisdom Tree option breaks the mold with Australia as its number two country weighting just slightly above the UK.

Source: International Small Cap ETFs Favor Japan and UK