Market Vectors, the exchange-traded product arm of Van Eck Global, is tapping into the resilience of Indonesia’s economy by launching a fund focusing on the country’s small cap equity sector.

The fund, Market Vectors Indonesia Small-Cap ETF, is traded on the NYSE Arca, with a ticker symbol of IDXJ, and aims to follow the Market Vectors Indonesia Small-Cap Index, which tracks the performance of the Indonesian small-cap sector. Although most of the constituents are companies domiciled and primarily listed in Indonesia, the index also includes offshore companies that generate at least 50% of their revenues in Indonesia.

Its net expense ratio is 61 basis points.

According to the firm, a number of factors attracted Market Vectors to the country. It is the fourth largest economy in the world, has an abundance of resources and is well situated wiith China and India.

“I think this is a large market, especially on domestic consumption-related themes. It’s growing by leaps and bounds,” said Ed Kuczma, Emerging Markets Analyst with Van Eck Global, during a phone conference on the launch. “We think that this is going to continue.”

Kuczma said that consumer spending accounted for about 60% of the country’s gross domestic product, which will help drive growth going forward. The country has also seen a dramatic increase in foreign investment with multinationals such as Unilever, Coca Cola and L’Oreal.

Moreover, he said that President Susilo Bambang Yudhoyono continues with economic reforms, helping to spur GDP growth of over 4% each year for the past ten years. The country has also done a lot to bring down debt to around 30% of GDP, down from roughly 150% just a few years ago.

Thanks to all of these developments, the country’s sovereign debt has greatly improved, with two credit rating agencies rating it as investment grade.

“It is a very strong and resilient economy,” Kuczma said. “It’s been stable in the face of a number of economic crises."

This is the firm’s 45th ETF overall, and the 15th that is internationally focused. It is also the firm’s second devoted to Indonesia.

Tommy Fernandez writes for Money Management Executive.