Market Overview

4 Outperforming Indian ETFs

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Indian equity markets are booming, and aren’t showing any signs of slowing down. The surprise rate cut executed by the Chinese Central Bank in order to fight its slowing growth, as well as European Central Bank President Mario Draghi’s commitment to its stimulus package has provided the Indian economy with plenty of fuel to pull away from the other BRICS countries (Brazil, Russia, India, China and South Africa).

The slowing of the economies China and the eurozone helped India’s major indices, the Sensex and Nifty, to hit new highs last week. This bolstered the hope that the Reserve Bank of India (RBI) will ease monetary policy before its review on December 2 in order to trigger more economic growth.

Highlighted below are a number of ETFs that have benefited from India’s recent boom and may continue to if the RBI decides to ease its monetary policy.

Related Link: The Best And Worst BRIC Country ETFs

iPath MSCI India Index ETN

The Barclays Bank Plc iPath ETNs linked to the MSCI India Total (NYSE: INP) follows 76 publicly traded Indian companies across 10 sectors. The most heavily-weighted sectors are information technology at 22 percent, financials at 19 percent and energy at 12 percent.

The top individual holdings include:

  • Infosys Ltd ADR (NYSE: INFY) with an 11.5 percent holding
  • Housing Development Finance Corp Ltd. making up 9.2 percent
  • Reliance Industries Limited coming in at 7.3 percent

INP is up 30 percent year-to-date and up 10 percent over the last six months. The ETN has a yearly fee of 0.89 percent.

WisdomTree India Earnings Fund

The WisdomTree India Earnings Fund (ETF) (NYSE: EPI) measures the performance of companies incorporated and traded in India that are profitable and are eligible to be purchased by foreign investors.

EPI consists of 220 companies across 10 sectors. Financials, information technology and energy are the most heavily-weighted sectors, similar to INP.

The top three holdings are the same as INP with different weights:

  • Reliance Industries Ltd coming in at 8.3 percent
  • Infosys with an 8.1 percent holding
  • Housing Development Finance making up 6.8 percent

EPI is up 33 percent year-to-date and 5 percent over the last six months. The ETF has an expense ratio of 0.83 percent.

EG Shares India Consumer ETF

The EG Shares India Consumer ETF (NYSE: INCO) consists of 30 publicly traded companies in the consumer industry in India. Consumer goods is the most weighted sector at 79 percent followed by Industrials at 15 percent.

The top individual holdings include:

  • MRL Corporation Ltd at 6 percent
  • Motherson Sumi Systems Limited making up 5.8 percent
  • Bosch Ltd also at 5.8 percent

INCO is up 49 percent year-to-date and 23 percent over the last six months. The ETF has an expense ratio of 0.89 percent.

India Small-Cap Index

The Market Vectors India Small Cap Index ETF (NYSE: SCIF) provides exposure to 102 small-cap Indian companies across ten sectors. The most heavily-weighted sectors are the financials at 27 percent, consumer discretionary at 22 percent and the industrials at 14 percent.

The top individual holdings include:

  • Arvind Limited making up 3.6 percent of the ETF
  • Vakrangee Ltd with a 2.9 percent holding
  • Unitech Ltd coming in at 2.9 percent as well

SCIF is up 49 percent year-to-date and 0.4 percent over the last six months. The ETF has an expense ratio of 0.93 percent.

It is unclear whether the RBI will cut rates in its next policy review. However, India is well positioned to continue to outperform under the new rule of President Modi and with gas prices falling regardless of what the RBI decides. 

Posted-In: Chinese Central Bank European Central Bank Mario DraghiLong Ideas Specialty ETFs Emerging Market ETFs Trading Ideas ETFs

 

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