Van Eck has filed with the Securities and Exchange Commission for an ETF offering access to small-cap companies in India.
The Market Vectors India Small-Cap ETF, which will be listed on NYSE Arca, will track the respective index, comprising small-capitalised companies in India. The constituent stocks must have a market capitalisation of greater than $150m on each quarterly rebalancing date.
As of October 20, the index included 225 securities and a market capitalization range of between $150m and $1.2bn, according to the filing.
The filing says the correlation between the fund's performance and the underlying benchmark is expected to be 95% or greater, before fees and expenses.
The fund may also use derivatives, including swaps, options, warrants, futures contracts, currency forwards and participation notes, in order to gain performance that reflects the index.
The filing also warns that investors should be willing to accept a high level of volatility in the price of the fund's shares, and should account for risks such as greater government control of the economy and lower levels of liquidity than companies in developed countries.
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