While some market participants may be doubting the efficacy of investing instocks outside the U.S., some investors may want to consider contrarian viewpoints and visit some ex-U.S. developed markets.

For small-cap investors, theSchwab International Small-Cap Equity ETF(NYSE:SCHC) is a sensible way of adding some international diversity to portfolios.

The Schwab International Small-Cap Equity ETF is up 10 percent year-to-date, performance that is mostly inline with the MSCI EAFE Index and other comparable developed markets large-cap benchmarks.

SCHC, which tracks the FTSE Developed Small Cap ex US Liquid Index, holds over 2,100 stocks, giving it a deeper bench than many domestic small-cap exchange traded funds.

One trait setting SCHC apart from rival funds tracking MSCI EAFE benchmarks is that the Schwab ETF features significant exposure to Canadian small-cap stocks.

While the portfolio excludes stocks from emerging markets, it still effectively diversifies stock-specific risk. Its 10 largest holdings account for only 4% of its assets,Morningstar said in a recent note.

However, its country composition is biased toward the Canadian market, which makes it riskier than its average Morningstar Category peer. Canadian small-caps feature a heavy dose of companies in the materials and energy sectors. These types of companies are risky because of their exposure to volatile commodity prices, so they can add to the funds risk.

Country and sector weights are meaningful. Over the past three years, SCHC is trailing the MSCI EAFE Small Cap Index by more than 600 basis points. That index does not feature exposure to Canadian stocks.

Japan, Canada and the U.K. combine for over 48 percent ofSCHCs geographic exposure.

At the sector level, the fund is highly cyclical. It allocates 33.2 percent of its weight to the industrial and consumer discretionary sectors. Due to its significant Canadian exposure, the materials and energy sectors combine for 16 percent of SCHCs weight.

Overweighting these sectors relative to the category average has hurt this funds performance, said Morningstar.

From its launch in January 2010 through April 2019 its return landed in the bottom quartile of the foreign small/mid-blend category. It was also one of the more-volatile funds in the category over this stretch.

One source of allure with SCHC is an annual fee of 0.12 percent per year, or $12 on a $10,000 investment, making it one of the cheaper funds in the international small-cap category.

Perhaps surprisingly, the international small-cap ETF has been less volatile than the U.S.-focused Russell 2000 and S&P SmallCap 600 indexes over the past three years.