Van Eck releases India small-cap ETF

New York-based asset manager Van Eck Global has released an ETF providing exposure to small-cap stocks in India.

The fund tracks the Market Vectors India Small-Cap index, comprising 122 stocks with an average market capitalisation of $456m, as of the end of July.

The underlying index uses a float-adjusted, market capitalisation weighting methodology. The top three weightings in the index consist of industrials at 27%, financials at 20% and materials at 14%.

The firm says India has achieved significant economic growth since undertaking economic liberalisation policies in 1991, and has quickly established itself within the global marketplace.

Indian small-cap stocks, supported by a fast-growing domestic consumer market, are well-placed for growth. Van Eck says India's rapidly rising middle class is predicted to triple over the next 15 years, making it twice the size of the US population.

The growing level of wealth among India's population is also expected to fuel demand for discretionary goods, services and homebuilding, further boosting domestic growth.

The ETF has a total expense ratio of 0.91%. The fund is the 27th ETF offered by Van Eck, complementing a range that provides exposure to fixed income and emerging markets such as Brazil.