After beefy returns, India's small-caps are cooling off.
After a ripping start to the year, Indian small-cap ETFs may be coming back to Earth. The three India small-cap ETFs returned between 40 and 50 percent since the start of the year, but each fell sharply in trading this week.
- The Market Vectors India Small-Cap ETF (SCIF | D-60) tracks an index of small-cap companies that are either incorporated in India or earn at least 50 percent of their revenues there. SCIF is priced a bit higher than its competitors, but investors will save on trading costs as SCIF sports the tightest spreads and sees the most trading volume.
- The EGShares India Small Cap ETF (SCIN | F-55) tracks an index that includes the 75 smallest Indian companies that meet the index's basic liquidity requirements. This ETF has a heavy skew toward financial firms (39 percent of its portfolio).
- The iShares MSCI India Small-Cap ETF (SMIN | F-95) tracks an index of the smallest 14 percent of Indian companies by market capitalization. Unfortunately, this fund is dangerously illiquid and trades at prohibitively wide spreads—its average bid/ask spread is currently 1.29%.
For side-by-side comparison of these ETFs, check out the India Small-Cap Segment Report.