Market Vectors India Small Cap Index ETF (SCIF), EGA Emerging Global Shares Trust (INXX): Two ETFs to Play This Reviving Emerging Market

Further, another bullish argument for the small caps is that unlike their large-cap counterparts, they have not witnessed much buying as yet. This makes them more attractive than the large caps from a valuation perspective. This is the sole reason why the large-cap PowerShares India ETF does not appeal to me as much as its small-cap cousin, the Market Vectors India Small Cap Index ETF (NYSEMKT:SCIF).

Another sector that’s sure to get a boost from these policies is the infrastructure sector, as infrastructure development is the backbone of economic growth. This is especially true for the Indian economy, which has to spend a great deal on infrastructure facilities in order to accommodate its ever-growing population.

To play this potential uptrend, investors could look into the EGA Emerging Global Shares Trust (NYSEMKT:INXX), which tracks the performance of infrastructure stocks in the Indian equity space. The ETF manages a relatively small asset base of $15.34 million and charges a 0.85% expense ratio.

The following chart shows the one-year comparative performance of these ETFs. Although at first glance the chart looks ordinary, the impressive thing is that these ETFs have recently started showing signs of a recovery:

SCIF data by YCharts.

The bottom line
Finally, before building exposure through these products, you must consider the fact that these ETFs demand a long-term investing horizon, as India’s economic turnaround will take a long time to accomplish, especially as the country struggles to make a mark in the global economy due to corruption and intimidating policy bottlenecks. However, with the policy actions at hand, the economy has surely taken a step toward recovery.

The article Two ETFs to Play This Reviving Emerging Market originally appeared on Fool.com and is written by Ankush Shaw.

Ankush Shaw has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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