With Europe's quantitative easing program now underway and a weaker euro boosting the continent's exporters, now is the time to invest in small-cap European stocks, WisdomTree's Jeremy Schwartz told CNBC.
"Hopefully the QE revives their local economy while the Fed is tightening. So you see this relative outperformance" of stocks with smaller market capitalizations, the director of research at WisdomTree Asset Management said in an interview with "Closing Bell" this week.
"If the [European Central Bank] is successful getting the rebound in the local economy, that's where the small caps really come in."
On Monday, the ECB launched its massive bond-buying program, which will pump 60 billion euros a month ($66.3 billion) into the euro zone economy. The central bank is hoping to help stimulate growth in the region and restore the inflation rate back to targeted levels.
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Meanwhile, the Federal Reserve is gearing up to raise interest rates in the U.S., perhaps as early as this summer. The U.S. dollar also continues to strengthen, which is hurting U.S. companies that export, Schwartz said. That's why he believes there is more opportunity in Europe.
Last week, WisdomTree launched its Europe Hedged SmallCap Equity Fund to take advantage of the rally it hopes is coming. The fund provides exposure to small-cap stocks within European equity markets while hedging its exposure to the euro. Therefore, there's no currency risk, Schwartz said.
"You don't benefit if it goes up. You don't get hurt if it goes down. It's just targeting the stocks," he said.
The exchange-traded fund, which holds just over 200 stocks, has an average market cap of $2 billion for securities, he said. Its top sectors are industrials, consumer discretionary, financials and materials.
"You get a very broad, diversified basket that you don't have to worry about picking the individual stocks," he said.
At one point last year, the firm's Europe SmallCap Dividend Fund offered returns of nearly 50 percent, according to Morningstar data, but has since retraced those gains.
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—CNBC's Matt Clinch and Linda Sittenfeld contributed to this report.