iShares, the worldâs largest ETF firm, today listed its second
India-focused fund with the Kansas City, Mo.-based BATS exchange,
this one focused on small companies, as the worldâs biggest
exchange-traded fund firm builds out both its product offerings
focused on India and its relationship with the BATS exchange.
The iShares MSCI India Small Cap Index Fund (NYSEArca:SMIN)
comes to market with a competitive edge over competing funds from
New York-based Van Eck and Emerging Global. SMIN has an expense
ratio of 0.74 percent, while its competitors both cost 0.85
The Market Vectors India Small Cap (NYSEArca:SCIF) and the
EGShares India Small Cap ETF (NYSEArca:SCIN) were launched last
summer and have gathered $48.6 million and $23 million in assets,
India ETFs arenât new, as many firms are looking to tap into
Indiaâs booming growth. iShares itself already offers two of
them, the most recent being its large-cap-focused âINDAâ listed
last week with BATS. India has more than 1 billion people, many of
whom are still young, meaning their most productive years are still
India is one of the bigger and more prospective emerging
markets, a growing piece of the investment universe that has
attracted a lot of investor attention as investors look outside the
heavily debt-laden developed economies for growth opportunities.
Accessing India through small-cap stocks is thought to be more
directly connected to domestic themes.
Focus On Financials
SMIN complements the iShares MSCI India Index Fund (BATS:Â
INDA) by focusing on securities from the bottom 14 percent of
equity market capitalization in India. INDA focuses on the top 85
percent of companies in Indiaâs equities market. Both funds
allocate nearly a quarter of their portfolios to financials.
SMIN has an annual expense ratio of 0.74 percent, compared to
INDAâs 0.65 percent price tag,
SMIN tracks the free-float market-capitalization-weighted MSCI
India Small Cap Index, which rebalances quarterly. The fund,
however, only holds 88 stocks, a fraction of its underlying
indexâs 236 holdings.
At launch, financials represented nearly 22 percent of the
sector allocation, followed by consumer discretionary and
iShares also launched the iShares India Nifty 50 Index Fund
(NasdaqGM:INDY) in late 2009 â a fund with just under 6 percent
allocated to financials that that now has about $336 million in
Following The Leaders
iSharesâ latest ETF brings the number of India-focused funds
or ETNs available to U.S. investors to 12, according to
IndexUniverseâs ETF Classification System.
The roster includes sector-focused strategies, large- and
small-cap funds as well as a bull-and-bear pair of ETFs by
Direxion. The oldest of them is Barclays Capital iPath MSCI India
ETN (NYSEArca:INP), launched in December 2006.
INP, which is tied to the MSCI India Total Return Index and owns
the top 68 companies in the Indian equities market, has gathered
$549 million in assets.
Still, itâs WisdomTree that holds the distinction of being the
first to put an India equities strategy in an ETF wrapper with its
WisdomTree India Earnings ETF (NYSEArca:EPI) launched four years
EPI came to market right just about the time that
developed-market economies were entering recession triggered by a
credit crisis in the United States. While emerging market economies
got caught in the downdraft, they looked more attractive than
developed countries as the global economy stabilized.
EPI owns some 164 securities in a strategy that has attracted
nearly $884 million in assets. The fund is the largest India ETF in
the market today, and it costs 0.83 percent, in line with other
large-cap focused India ETFs.
Building Up A Relationship With BATS
SMIN is iSharesâ fifth listing with No.3 U.S. exchange BATS.
The company is looking to put a total of nine country-focused ETFs
on the newcomer exchangeâs board.
BATS first announced it was joining NYSE and Nasdaq in the
primary listing business last year, and trumpeted the fact that
iShares was its first customer.
Industry sources speculate that BATS is muscling into the
primary listing business by competing on price, though itâs not
yet clear whether cheaper listing costs will lead to lower fees for
iSharesâs planned roster of country ETFs for BATS, including
the already launched âINDAâ and âSMIN,â as well as the
Scandinavia-focused ETFs, âENOR,â âEDENâ and âEFNL,â
- iShares MSCI India Small Cap Index Fund (BATS:SMIN)
- iShares MSCI India Index Fund (BATS:INDA)
- iShares MSCI Norway Capped Investable Market Index Fund
- iShares MSCI Denmark Capped Investable Market Index Fund
- iShares MSCI Finland Capped Investable Market Index Fund
- iShares MSCI Australia Small Cap Index
- iShares MSCI Canada Small Cap Index Fund (BATS:EWCS)
- iShares MSCI Germany Small Cap Index Fund (BATS:EWGS)
- iShares MSCI United Kingdom Small Cap Index Fund
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