Van Eck Bolsters Small-Cap Emerging Market Offerings With New India ETF
Thursday, August 26th, 2010Michael Johnston submits:
Van Eck announced on Wednesday the latest addition to its ETF product lineup, rolling out the Market Vectors Small Cap India ETF (SCIF). The new ETF will seek to replicate the performance of the Market Vectors India Small-Cap Index, a benchmark that includes about 120 constituents with an average market capitalization of approximately $450 million.
SCIF joins two existing Market Vectors ETFs offering exposure to small cap equities in emerging markets, including the Brazil Small Cap ETF (BRF) and Latin America Small Cap ETF (LATM). ETFs from other issuers offer exposure to small cap stocks in China (HAO) and Japan (SCJ, JSC). Funds targeting small cap stocks in international market have become popular with investors in recent years because they generally maintain unique risk/return profiles relative to the “first generation” of international equity ETFs that are dominated by large caps. Small cap stocks tend to depend more heavily on the local economy, while mega caps are often multi-national firms that generate revenues in countries around the globe and thus are not necessarily the best representation of their respective local economies. Moreover, small cap equities tend to be more representative of sectors that aren’t adequately represented by mega caps, including consumer products and services.
