India: Think Small

Van Eck Global's Market Vectors Small-Cap Brazil Exchange Traded Fund (BRF) is quite the success story, returning 74% and seeing assets swell to about $500 million since its May launch. Now Van Eck is rolling out an ETF to track India's small companies. On Oct. 23 it filed a preliminary prospectus for the Market Vectors India Small-Cap ETF, which will provide U.S. investors with access to a potentially more lucrative corner of the Indian market. Smaller companies have rallied this year, with the SPDRS S&P ETF of small-cap emerging-market stocks besting a wider basket of emerging-market stocks by some 18 percentage points so far in 2009. The Jakarta Composite Index—India's broad benchmark—is up 76% this year. The filing warns that currency risk and the illiquid nature of the stocks may result in extreme volatility.