My colleague Jesse Jenkins and I warned about this last Friday, when we argued that cap and trade advocates would use recent news that Deutsche Bank is moving clean energy investment overseas as evidence that cap and trade would have kept investment in the United States.
Small caps are your best canaries in the coal mine for risk appetite and the US picture, the stocks making up the RUT have much less overseas exposure than their larger cap brethren.
First there are a limited number of ADRs available and by only investing overseas via ADRs you miss many promising small and mid cap companies listed on foreign markets.