He's using INP as more of a trading vehicle, however, in clients' portfolios. "We don't mean to use it that way, but our strategy is to protect on the downside and get as much on the upside as possible," Feight said. "That means we put strict stop-loss orders on each ETF. In the case of our more-volatile funds, that can cause them to act more like trading vehicles."

Feight warns that INP has averaged daily swings of 2-3% since his advisors started using it. That was in December of 2006, just after the ETN launched.

"We use three different ETFs to gain emerging markets exposure," Feight said. "We like to create our own separate emerging markets allocations for some clients rather than using a broader benchmark. It lets us control volatility to a greater extent."

He says the firm will keep INP as part of its longer-term allocation plan for more aggressive investors. "Over the next 10 years, we think that India along with several other key emerging markets will provide important diversification benefits for U.S. investors," Feight said. "That's where we see more of the world's profits coming from in the future."

He adds that he likes some of the concepts behind the new India-focused ETFs. But he plans to monitor issues such as tracking error and performance over time before making any concrete decisions. "I'd like to see even more choices become available in emerging markets," Feight said. "The more tools you have to control volatility and deal with changing diversification issues over time, the better."

How WisdomTree Compares

The soon-to-debut ETFs specializing in India figure to introduce several new wrinkles.

The benchmark for WisdomTree's India Earnings ETF won't use derivates. It also will be broader in scope with some 150 local companies included rather than INP's total of around 62. And unlike the ETN, which is strictly market-cap weighted, WisdomTree's version will use a fundamentally weighted methodology. Names will be ranked chiefly by profitability measures.

As such, sector weightings should be much different in some areas. INP, for example, has more than a quarter of its assets in financials. WisdomTree's benchmark holds about half that much. Conversely, energy is a much smaller part of the ETN's portfolio than that of the new one. WisdomTree's index holds about 25% in that sector. Tech exposure is about the same in each.

"India's one of the most expensive markets in the world right now," said Siracusano. "With our focus on profitability rather than market-cap sizes, we're going to be able to give people an opportunity to gain exposure to the Indian market at more reasonable prices."

He estimates that the trailing price-earnings ratio of the underlying index for the new ETF is trading around 40% lower than that of the soon-to-be rival ETN's benchmark. By WisdomTree's figures, their ETF is trading at around 15 times trailing PE multiples compared to current market-cap-weighted indexes' 25 times.

PowerShares Using Indus Benchmark

The PowerShares India-focused ETF will provide a third alternative indexing methodology. While it'll come with a traditional market-cap-sized weighting overlay, the PowerShares India Portfolio will adjust individual names according to foreign investment flows.

The government imposes an average limit of 24% on foreign holdings in the country. But with its sheer size, Indus Advisors' Nathan says that still leaves room for around $250 billion in outside capital to flow into markets.

"But some industries are restricted more than others," he said. "Many banks, for example, can only accept about 20% in foreign investments. Media outlets are restricted to about 10%."

Such regulation varies not only by sectors but in many cases by companies, Nathan says. Figuring those sorts of nuisances into an index is important to truly capturing proper exposure to Indian stocks, he added.

"We've built a passive index that takes into account foreign holding limits, company by company. It also includes how much of those limits have been used," said Nathan.

Allocations are based on IndusCap. That's a measure of the capitalization available for each company to foreign investors each day. It takes into account not only current foreign holdings but also so-called "locked-in" shares. Those are shares not available in secondary markets. These are typically owned by groups such as promoters and government agencies.

The benchmark includes 50 stocks with the highest IndusCap measures. It's rebalanced quarterly. Nathan says that he expects turnover to be more than other India benchmarks.

No company will represent more than 10% of the index's total assets. And no single name in the bottom half of the weightings will be more than 5% of the total index. The top 10 names accounted for nearly half of the index's total entering February.

Indus also breaks sectors into broader categories than most benchmarks. Those are: Energy (25%); Tech and Telecom (28%); Financials (14%); Industrials (16%) and Consumers (10%). The latter includes Health care. Another 7% is scattered among other smaller categories.

WisdomTree says foreign investment levels are among the fundamental factors its new benchmark for India will consider as well.

"The investible universe an index measures is critical in markets like India where there are very defined limits on how much foreigners can invest," Nathan said.

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