This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

India ETFs Ride High on Robust Economy

Stocks in this article: EPI PIN INDY

NEW YORK ( TheStreet) -- Accelerating inflation in India generates headlines, but it's a consequence of a strong economy. The Reserve Bank of India is likely to raise interest rates soon, and that could lift the value of the rupee versus the U.S. dollar.

That, in turn, would add some momentum to India ETFs that are already leading the Brazil-Russia-India-China group of funds and among the better performing emerging market ETFs in 2010.

The Indian government projects GDP growth of more than 8% for fiscal year 2011, while a domestic economic think tank estimates the economy will grow more than 9%. That growth, along will the relaxed monetary policy from 2008, is leading to inflation, which was 10.2% in May. The central bank started raising interest rates in March and is expected to raise them again soon.

Usually inflation is a negative, but these are not usual times. Much of the world may look on with envy as India enjoys robust growth and rising prices, the opposite of slow growing or stagnant developed economies that cannot seem to generate any inflation. In other words, India has the kind of problems that the developed world wishes for. India's inflation come with growth, whereas the developed world's low inflation is the result of too much debt.

For investors, that means there will be opportunities for profit. There are two solid ETF options for India in PowerShares India Portfolio (PIN) and WisdomTree India Earnings Fund (EPI).

Superficially, there does not appear to be much of a difference between EPI and PIN. A comparison of the top 10 holdings, for instance, shows that seven are the same.

Still, small differences can translate into a wide performance gap in the long term, and choosing between the two funds becomes more important the longer an investor intends on staying exposed to India.

For example, in the past month, PIN is outperforming EPI by a slim margin with gains of 3.6% for the former and an increase of 2.8% for the latter.

However, on a three-month timeline, the funds have performed almost identically. On a six-month and one-year timeline, EPI has outperformed PIN.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs