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!

Is It Time To Buy India?

NEW YORK (TheStreet) -- At the end of last month we looked at whether it made sense to buy Indonesia as a contrarian trade after months of declining prices and deteriorating sentiment. Since then the Market Vectors Indonesia Equity Index ETF (IDX) has had a bumpy ride to an almost 10% gain, along with many other emerging markets, even after dropping 11% in the last week.

An even bigger investing basket case has been India which has had problems with relatively high inflation and the Indian rupee. India's currency has declined 13% against the US dollar in 2013; a huge move for a currency. Last week India's central bank raised rates to 7.5% from 7.25% to try to contain inflation, a move that is putting political pressure on Prime Minister Manmohan Singh who is up for reelection in April 2014.

There are of course many ETFs providing access to India. The largest two funds are the WisdomTree India Earnings Fund (EPI) which has $900 million in assets and the iShares India 50 ETF (INDY) with $400 million in assets.

EPI as the name implies weights its constituents by earnings over the prior fiscal year. Energy is the largest sector at 20% of the fund followed by banks at 19% and software and services at 14%. There will be many unfamiliar stocks in the fund but investors may recognize some names including infosys (INFY) and Tata Motors (TTM).

INDY looks a lot different than EPI at the sector level. Energy related companies only have an 11% weighting. Banks and finance related companies have a combined 24% weighting. The two funds have seven of their respective top 10 holdings in common but the largest stock in INDY is tobacco company ITC Limited with a 10% weighting but it only has a 1.75% weight in EPI.

Both funds are broad proxies for the India market and have traded in line with each other and are very volatile. iShares reports that INDY's beta is 1.46 which means that for every one percent that the S&P 500 moves, INDY can be expected to move 1.46%. EPI's beta is not reported on the fund's webpage it is it obvious from a chart comparing the two that the volatility profiles are very similar.

1 of 2

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!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

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