This Day On The Street
Continue to site
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

Tap India's Booming Growth With EPI

NEW YORK ( ETF Digest) -- As one of the four BRIC countries (Brazil, Russia, India and China), with a quickly developing economy and an average growth rate at nearly 9% per year, India might look like an ideal investment opportunity.

This country of more than a billion people has made several moves to open itself up to foreign investment and liberalize its economy, including the privatization of publicly held companies, industrial regulation improvements and capital market reforms. Although more-developed economies were swooning during the 2008 financial crisis, India still managed a respectable 6% growth rate.

The Bombay Stock Exchange (BSE Sensex) was trading at a three-week high last week before tumbling on news from the Indian commerce ministry last Wednesday that wholesale price index inflation had risen a higher-than-expected 6.95% over last year.

It was the first time India's monthly inflation rate had grown in the preceding five months. The losses probably would have been more severe if the Reserve Bank of India hadn't announced a 75-basis-point cut for its cash reserve ratio rate on banks.

Still, Indian exchange-traded products have performed well in 2012, registering gains of as much as 40% since the beginning of 2012 before pulling back last week.

The WisdomTree India Earnings Fund (EPI) tracks the WisdomTree India Earnings Index (WTIND). It is by far the most liquid of the India ETFs, with an average daily volume of 2.6 million.

According to the fund's Web site, the index is weighted fundamentally and "measures the performance of companies incorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors."

Its top three holdings are Reliance Industries Ltd. at 7.62%, Infosys Ltd. (INFY) at 7.1%, and Tata Motors Ltd. (TTM) at 5.64%. It is most heavily concentrated in financials (26.46%) and energy (17.88%). EPI has a very high expense ratio of 0.83%.

Although it is much less liquid, with a daily average volume of just 106,000 shares, the iPath MSCI India Index ETN (INP) is another viable option for investors.

It tracks the MSCI India Total Return Index, "a free-float-adjusted market capitalization index designed to measure the market performance, including price performance and income from dividend payments, of Indian equity securities."

INP has similar but different allocations, with 8.89% in Reliance Ltd., 8.76% in Infosys Ltd. and 6.24% in Housing Development Finance. Its top sector allocations are financials (28%), information technology (15%) and energy (12.8%).

EPI (red) and INP (green) have performed very similarly, with INP slightly underperforming EPI. EPI's year-to-date gains briefly touched the 40% mark in late February. In blue, the Bombay Stock Exchange (BSE Sensex).

Join the banter with us on Facebook and Twitter.


Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%
YHOO $27.97 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs