As the ETF industry has exploded onto the scene in recent years, sponsors have aggressively launched funds in an attempt to gain market share. While many of these new ETFs have attracted sufficient investor funds to justify continued operation, some have failed to garner a level of investment necessary to support an active, liquid market and been shuttered. And then there are those that remain in business but are cited as having "insufficient liquidity." Although there are certain rules of thumb – assets under management ((AUM)) of $25 million and daily volume of 25,000 are often cited as “liquidity thresholds” – there is no hard evidence to support these guidelines. In an effort to determine where illiquidity ends and an active market begins, I analyzed the impact of size and daily volume on the liquidity of various ETFs.

To start, I divided ETFs into six baskets based on three-month average daily volume:

By Murray Coleman

After years of investor complaints that its low-cost lineup of index-based funds has been missing a key component, the Vanguard Group has finally responded.

Micro-Cap ETFs Will Have Their Day (It's Just Not Today)

Lately, mid-cap ETFs have surged on ahead of all the other caps. Bringing up the rear are the microcaps.

Five years ago, that wasn't the case and microcaps, those companies with market capitalizations between $55 million and $500 million, were soaring to new heights. But Murray Coleman for Index Universe says that with the category in a slump, even an "adventurous contrarian" considering a microcap fund may find many choices among the latest ETFs.

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.

With last week's launch of an iShares MSCI EAFE Small Cap ETF (SCZ), investors now have five choices in this hot space. How do you figure out which one is the best?

I worry that most investors don’t even bother. They figure that one small-cap international ETF is as good as another, so they just pick one and go. But one thing I’ve learned from studying this space is that different ETFs within the same asset class can be very different, and it pays to look closely.

Friday Barclays Global Investors' iShares family launched eight international exchange-traded funds on two different exchanges.

The launch can be divided into three buckets: international small cap, real estate, and emerging markets.

Multi-Region Developed Market ETFs
BLDRS Developed Markets 100 ADR Index Fund (ADRD)
Claymore/Robeco Developed International Equity ETF (EEN)
Claymore/Robeco Developed World Equity ETF (EEW)
iShares S&P Global 100 Index Fund (IOO)
iShares MSCI EAFE Index Fund (EFA)
iShares FTSE Developed Small Cap ex-North America Index Fund (IFSM)
PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio (PXF)
PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (PDN)
RevenueShares ADR Fund ETF (RTR)
Vanguard Europe Pacific ETF (VEA)