Why You Should Consider This Indian Small-Cap ETF

India has the second-fastest growing GDP in the world behind China. Last week Morgan Stanley said India might overtake China as the fastest growing economy by 2015, and could reach a growth rate of 9.5 percent between 2011 and 2015.

The South Asian country is expected to double infrastructure and add six times more workers than China over the next 5 years. Morgan Stanley economist Chetan Ahya said, "...there will be a clear divergence of growth rates between the two countries". He projects India will add 136 million workers by 2020, compared to China's 23 million workers.

Manmohan Singh, the Prime Minister of India, says the government plans to double its spending on ports, roads, and power plants between 2012 and 2017. This will most likely lead to an increase in workers and salaries, which will help boost growth in the economy.

With India's growth rate accelerating so fast, it's worth looking at small cap investment opportunities in the country. One of the easiest ways to gain exposure is through an ETF, and now there's one that offers exposure to small cap stocks in this overlooked market.

This could be a great place to put your money if you're looking to get some broad-based international exposure, but still stay within the small-cap investing sphere. With bond returns so low, and uncertainty rampant in many sectors of the U.S. economy, emerging market small caps could continue to outperform developed markets.

The ETF has an expense ratio of 0.85 percent, which is slightly higher than most ETFs. It is heavily invested in commercial banks, IT services, and software - check out the weightings of the top five sectors below.

This second chart further breaks down its allocation of funds. It shows the company's top ten holdings as of June 30.

 I like this ETF and will continue to follow its performance in coming weeks.