I am using xelatex and while formatting by \caps (packages soul, soulutf8, polyglossia), the ending utf8 signs get stripped ("gītā" gets "gīt", see image below). Did anybody notice this issue and could give some help please?
The document can be simplified as follows:
% xelatex, texlive 2013
\documentclass[]{scrbook}
\usepackage{polyglossia}
\usepackage{xltxtra}
\usepackage{soul,soulutf8}
\begin{document}
\caps{gītā}
\end{document}

Update:
Thanks to the kind help, I could redefine the document as follows and understand the matter better:
% xelatex, texlive 2013
\documentclass[]{scrbook}
\usepackage{polyglossia} % calls fontspec
\setmainfont
[Ligatures=TeX,
SmallCapsFeatures={LetterSpace=3.0}, % \textsc{} rather than \caps{} from "soul"
Numbers=OldStyle,
]
{TeX Gyre Pagella} % could be any unicode font which supports small capitals
\begin{document}
\textsc{gītā}
\end{document}
I would also appreciate if somebody could explain shortly the main difference between \textsc{} from "fontspec" with letter spacing, \caps{} from "soul" and a feature if provided by "microtype".


fontspecrather than trying to use something likesoul? That is, you are using xelatex in any case, so why not use the features that enables you to access? – cfr Feb 04 '14 at 02:52xltxtra, unless you really need its features (I bet you don't). Load justfontspec. – egreg Feb 04 '14 at 09:26