has maintained robust economic expansion over the years, bolstered
by a high level of internal consumption. With that comes a new
exchange traded fund (
) that will give investors another way to target this subset.
Van Eck is launching the
Market Vectors India Small-Cap Index ETF (NYSEArca:
on Wednesday. It's another way to play the high rate of internal
consumption in the country, since small-caps are generally
considered plays on domestic consumers. [
Best ETFs to Play India's Fast-Growing Economy.
The fund tries to reflect the performance of the Market Vectors
India Small-Cap Index, which uses a float-adjusted modified market
capitalization-weighting methodology. It contains 122 holdings.
Stocks in the index need to have a minimum market cap of $150
million, a three-month average daily trading volume value of $1
million and a minimum trading volume of 250,000 shares per month
over the last six months. [
India ETFs Look for the 'Sweet Spot.'
SCIF will compete with
EGShares India Small-Cap (NYSEArca: SCIN)
, which launched last month. SCIN holds 75 companies and has a
0.85% expense ratio.
It's worth remembering that small-caps are riskier investments.
They have greater volatility, lower trading volume and less
liquidity than large companies. Additionally, potential investors
should be aware that emerging markets come with greater political
and economic instability.
For more information on India, visit our
Max Chen contributed to this article.