Is iShares International Small-Cap Equity Factor ETF (ISCF) currently a top-performing ETF?

Overview of iShares International Small-Cap Equity Factor ETF (ISCF)

Launched on April 28, 2015, the iShares International Small-Cap Equity Factor ETF (ISCF) provides investors with access to the Foreign Small/Mid Blend ETF segment, offering a diversified approach to international small-cap equities.

Understanding Smart Beta ETFs

Traditionally, the ETF market has been dominated by funds that follow market capitalization-weighted indices, which aim to mirror the performance of a specific market sector or the broader market. These types of indices are favored by investors who trust in market efficiency, as they offer a straightforward, cost-effective, and transparent way to track market returns.

Alternatively, some investors seek to outperform the market by choosing funds that follow non-market cap weighted strategies, commonly referred to as smart beta. These strategies select stocks based on certain fundamental attributes or a mix of factors, with the goal of enhancing risk-adjusted returns.

Smart beta ETFs come in many forms, ranging from simple equal-weighted approaches to more complex methodologies that focus on fundamentals, volatility, or momentum. However, not all smart beta strategies have consistently delivered superior performance.

Fund Details and Benchmark

ISCF is managed by Blackrock and has accumulated over $611.82 million in assets, positioning it as an average-sized fund within its category. The ETF seeks to replicate the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index, before fees and expenses.

The STOXX International Small-Cap Equity Factor Index, which the fund references, consists of small-cap stocks from developed markets outside the United States, selected for their favorable exposure to specific style factors within set constraints.

Fees and Expenses

Expense ratios are a key consideration for investors, as lower costs can lead to better net returns over time. ISCF charges an annual operating expense of 0.24%, making it one of the more cost-effective options in its category. The fund also offers a 12-month trailing dividend yield of 3.44%.

Sector Allocation and Major Holdings

Despite the benefits of diversification, such as reduced single-stock risk, it is essential to review an ETF’s holdings before investing. Most ETFs, including ISCF, provide daily transparency regarding their portfolios.

Among its holdings, Abn Amro Bank Nv (ABN) represents approximately 0.93% of the fund’s assets, with Banco De Sabadell Sa (SAB) and Banca Monte Dei Paschi Di Siena Sp (BMPS) following. The top ten holdings collectively make up about 5.59% of the fund’s total assets.

Performance and Risk Profile

As of February 25, 2026, ISCF has delivered a year-to-date return of roughly 9.16% and has climbed about 39.11% over the past twelve months. Over the last year, the ETF’s price has ranged between $30.25 and $45.54.

With a beta of 0.82 and a three-year standard deviation of 14.53%, ISCF is considered a medium-risk investment within its category. The fund holds around 1,117 securities, providing broad diversification and reducing company-specific risk.

Alternative Options

ISCF is a solid choice for those aiming to outperform the Foreign Small/Mid Blend ETF segment, but other funds are also worth considering. For example, the State Street SPDR S&P International Small Cap ETF (GWX) tracks the S&P Developed Ex-U.S. Under USD2 Billion Index and holds $905.31 million in assets, while the Schwab International Small-Cap Equity ETF (SCHC) tracks the FTSE Developed Small Cap ex US Liquid Index and manages $5.6 billion. GWX has an expense ratio of 0.40%, and SCHC charges just 0.08%.

Investors seeking lower costs and reduced risk might prefer traditional market cap-weighted ETFs that aim to match the returns of the Foreign Small/Mid Blend ETF segment.

Conclusion

For more information on ISCF and other ETFs, explore products that align with your investment goals and stay updated with the latest trends in ETF investing.