Buying the India Small Caps ETF (SCIN)

The Emerging Global Shares Indxx India Small Cap ETF (ticker: SCIN, listed on the NYSE) was launched at the end of July of this year. This fund invests, not in ADRs traded on the NYSE, but in small-cap equities listed on Indian stock exchanges. Top 10 holdings include: Indian Bank, UCO Bank, Patni Computer Systems, Godrej Industries, Dish TV India, Amtek Auto, Vijaya Bank. The ETF covers a broad array of industrial sectors: software and computer services, banking, food producers, real estate, travel & leisure, metals & mining, chemicals, industrial engineering.

The investment thesis behind this trade is that of the expanding middle class in emerging markets. India's middle class is expected to grow from around 5% of the population in 2005 to more than 40% in 2025 according to a McKinsey study. This class will demand cars, electronics, cell phones and other consumer products as standards of living increase. India should exceed China's population within the next 25 years and, contrary to China, is a democracy.

A lot of ETFs offer exposure to the Indian market but are invested in large capitalization companies. SCIN offers an opportunity to tap into the small Indian companies that can grow at a much higher pace than large companies.

Detailed information on this ETF can be found here.

I am buying SCIN today at a price of $25.89 for a total of $10,000.
Stop loss: $22.5