Small Cap India ETF from Van Eck (SCIF)
I’ve said it once and I’ll say it a billion times: I love Asian stocks. But as much as I like the opportunities in Asia, exchange-traded fund sponsors have been less willing to offer new Asian niche ETFs. Sure, virtually all countries are covered in one shape or form by an exchange-traded fund, but not many also have a small and large cap niche ETF. Van Eck has come to fill the void for India.
This new ETF is just plain awesome. The Van Eck Market Vectors Small Cap Index (SCIF) is designed to track a model portfolio of 122 India-based companies. These firms, though plenty, aren’t exactly monsters with an average market cap of less than $500 million. (There is a bit of a difference between Indian small caps and US based small caps).
One of the best bits, though, has nothing to do with the broad based portfolio or the small cap size of the individual components. At .85 percent per year, this ETF is also one of the cheapest ways to stake a claim in the growing Asian trade.
ETF Weightings
The Van Eck ETF is a little nontraditional in how it weights its components. The individual stocks are weighted by marketcap, but the ETF is also sector weighted differently than the economy as a whole. For one, it largely ignores telecom stocks, a huge business in India. Instead the ETF is heavily weighted in industrials, financials and materials, which in my opinion, puts it in a perfect position for a recovery.
No exchange-traded fund is perfect due to the fact that many stocks are closed off to foreign investment. However, for what Van Eck had to work with, SCIF is a piece of work.
