NEW YORK (TheStreet) -- Last week we looked at the success of the PowerShares Buyback Achievers Portfolio (PKW) - Get Invesco Buyback Achievers ETF Report, which has a market value of nearly $3 billion and has soundly outperformed the S&P 500 during the current bull market.

Now exchange-traded fund provider PowerShares is trying to build on that success with an international version of that ETF: the PowerShares International Buy Back Achievers Portfolio (IPKW) - Get Invesco International BuyBack Achievers ETF Report.

The new fund adds to PowerShares' lineup of 40-plus smart beta funds. Smart beta funds typically take a broad-based index and then screen it for specific fundamental or qualitative factors in order to boost performance.

These two PowerShares funds screen for companies that have bought back enough of their own stock so as to reduce the number of shares outstanding by at least 5% over the past year.

The basic argument for owning shares of companies that buy back their own shares is that companies must generally be in good financial condition in order to execute buybacks. Buybacks are viewed as a returning of capital to shareholders because a reduced share count increases the earnings per share of the remaining shares and potentially leaves more capital available for dividends.

Although many of the stocks in PKW are large-cap household names such as Pfizer (PFE) - Get Pfizer Inc. Report or Directv (DTV) , that is not the case with IPKW. Each of the top 10 holdings in IPKW are mid-cap and small-cap stocks.

It is also worth noting that the new international fund has only 41 holdings, vs. 177 for PKW. This means IPKW takes more single-stock risk. Nine of the companies in IPKW have weightings of 4% to 5%, vs. just four in PKW.

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Japan has the largest country weighting, at 29%, followed by the U.K., at 22%, and Denmark and Canada, with 8% each.

The sector makeup of IPKW is more balanced than PKW, with a still large 28% in financials and weightings in the midteens in consumer discretionary, consumer staples and materials.

With PKW, there's the question of whether its outperformance during the five-year bull market is less a factor the qualitative factor of buybacks and was more a function of its huge exposure to the consumer discretionary sector, which currently is up 35% vs. just 12.4% for the S&P 500. PKW is up 225% in the bull market compared to 150% for the S&P 500 but the Consumer Discretionary Select Sector SPDR (XLY) - Get Consumer Discretionary Select Sector SPDR Fund Report was up 272%.

The balanced sector allocation of the international fund will be a truer test of the validity of the buyback strategy. It is still in the early innings of the smart beta trend, and there are bound to be some funds that do work out, some that don't. For now it is too early for any definitive conclusions.

At the time of publication, Nusbaum had no positions in securities mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.