First Indonesia Small-Cap ETF Debuts (IDXJ, IDX, BRF)

Van Eck Global, parent company of Market Vectors, the fifth-largest U.S. ETF sponsor by assets, introduced the Market Vectors Indonesia Small-Cap ETF IDXJ today, the first small-cap ETF devoted to Southeast Asia's largest economy. The new ETF tracks the Market Vectors Indonesia Small-Cap Index, which is a rules-based, modified capitalization weighted, float adjusted index. To be included in the index, companies must either be listed or domiciled in Indonesia or derive half of their revenue from the country. Stocks must have market values of $150 million on the index's rebalancing date and have a three-month average daily trading volume of at least $1 million to be included in the index. As of the end of February, financials accounted for 39.5% of the index's weight. Industrials checked in at 18.3% while energy and consumer staples were both around 15.5%. Materials and consumer discretionary names accounted for the remaining weight. Home to 25 stocks, IDXJ has a net expense ratio of 0.61% that will be capped there until at least May 1, 2013. That's only slightly more expensive than 0.6% charged by the Market Vectors Indonesia ETF IDX, the first Indonesia-specific ETF. The Market Vectors Indonesia ETF is 38 months old and has over $527 million in assets under management. "Indonesia has grown rapidly over the past several years and we believe it is well positioned to continue to prosper, with an economy supported by rising domestic consumption and higher levels of disposable income," Ed Lopez, marketing director for Market Vectors ETFs, said in a statement. "In our view, smaller cap companies that generate the majority of their revenue 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 IDX." Indonesia, the fourth-largest country in the world by population, has seen substantial foreign investment over the past several years and the country's sovereign debt ratings were upgraded to investment grade last year by Fitch Ratings and earlier this year by Moody's Investors Service. The Market Vectors Indonesia Small-Cap ETF will be the firm's fifth equity-based ETF devoted to an emerging Asian economy. In addition to IDX, Market Vectors sponsors the Market Vectors China ETF PEK, Market Vectors India Small-Cap ETF SCIF and the Market Vectors Vietnam ETF VNM. Overall, IDXJ represents the 45th Market Vectors ETF and the firm's fifth country-specific small-cap ETF. In addition to IDXJ and SCIF, Market Vectors also sponsors the highly successful Market Vectors Brazil Small-Cap ETF BRF along with the Market Vectors Russia Small-Cap ETF RSXJ and the Market Vectors Germany Small-Cap ETF GERJ.