The iPath MSCI India Index (INP) exchange traded note (ETN) was created to be a liquid investment tool that provided overseas investors with a passage to India.

It was the only product that offered a pure play to one of the fastest-growing economies in the world. Lawrence Carrel for TheStreet reports that INP has since run afoul from local regulatory authorities last fall, and since then, it hasn’t been performing quite like it had been. Last year the fund was up 87.1%. So far this year, it’s down 16%.

INP is an ETN, meaning that it doesn’t hold stocks or securities. Instead, it is backed by the issuer’s promise to match the return of the index, minus expenses. INP is no longer issuing shares and now that the supply is fixed, the share price is out of line with the net asset value (NAV). Shares have traded as high as 25% over the past several months. This heightened volatility takes away from INP’s appeal, but now there will be a new way to access India.

WisdomTree Trust is seeking to issue shares under an earnings-weighted exchange traded fund (ETF) giving investors a true India ETF (EPI). WisdomTree has sought to overcome the regulatory challenges presented by India and the IRS.

The ETF is set for a February launch, so stay tuned.

Tags: Asia, Emerging Markets, ETNs, India