US-based Van Eck Global has announced the launch of the Market Vectors Indonesia Small-Cap ETF (IDXJ), the first US-listed ETF designed to provide investors with pure-play exposure to the small-capitalisation segment of Indonesia’s stock market.
Van Eck has launched the Market Vectors Indonesia Small-Cap ETF enabling investors to capitalise on Indonesia's booming stock market, based in Jakarta (pictured).
IDXJ is the second ETF introduced by Market Vectors that focuses exclusively on Indonesia, joining the Market Vectors Indonesia Index ETF (IDX), which focusses on the large-cap segment of the fast-growing Indonesia economy. IDX has earned a 5-star Morningstar rating on both a 3-year and overall basis (as of 2/29/12).
Indonesia, home to roughly 240 million people, has Southeast Asia’s largest economy: $834 billion in 2011. Beginning in 1999, the country embarked on a path of sounder fiscal and monetary policies that allowed it to improve its financial condition dramatically. As a result, the country has attracted substantial foreign direct investment and its sovereign debt rating has been upgraded to investment grade by both Fitch and Moody’s.
Commenting on the launch, Ed Lopez, Marketing Director at Market Vectors ETFs, said: “Indonesia has grown rapidly over the past several years and we believe that it is well positioned to continue to prosper, with an economy supported by rising domestic consumption and higher levels of disposable income.
“In our view, smaller cap companies that generate the majority of their revenues in the local market provide the best way for investors to gain exposure to the domestic growth story. In that regard, IDXJ provides a complement to our broader-based Indonesian ETF, IDX.”
IDXJ seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of Market Vectors Indonesia Small-Cap Index (MVIDXJTR), a rules-based, modified market capitalisation-weighted, float-adjusted index comprised of publicly traded small-capitalisation companies that are domiciled and primarily listed in Indonesia, or that generate the majority of their revenues in Indonesia.
As of February 29, 2012, the leading sectors in the index were Financials (39%), Industrials (18%), Energy (17%), and Consumer Staples (15%). To be included in the index, companies must have a market capitalisation in excess of $150 million, three-month average daily trading volume of at least $1 million, and a minimum trading volume of 250,000 shares each month over the last six months. The average market capitalisation of the index at launch was $688 million.
IDXJ joins the Market Vectors family of ETFs that, in addition to IDX, includes a number of other emerging market small-cap ETFs, such as the Market Vectors India Small-Cap Index ETF (SCIF), the Market Vectors Russia Small-Cap ETF (RSXJ) and the Market Vectors Brazil Small-Cap ETF (BRF).
The fund has a Total Expense Ratio (TER) of 0.61% (capped until at least 1 May, 2013) and trades on the NYSE Arca.