ETF Chart of the Day: Investigating India

February 25th at 12:26pm by Paul Weisbruch, Street One Financial

Monday’s global rally in equities was met with institutional re-positioning of existing options hedges around underlying long positions, and in some cases opening new positions like we saw in EPI (WisdomTree India Earnings Fund, Expense Ratio 0.83%) for example.

Buyers of June 17 puts were around in good size in this ETF, which has become a household name for the most part since its 2008 inception for those familiar with Emerging Markets Equity investing via ETFs. EPI has a substantial $818 million in assets under management currently and always trades healthy volume on a daily basis (approximately 3.9 million shares in ADV currently).

Following a mold similar to that of many WisdomTree “earnings” based products, EPI weights companies that are listed and incorporated in India in a fundamentally weighted index according to proprietary measures. The underlying Index is known as the WisdomTree India Earnings Index and it currently has top end exposure to a few names that most will be familiar with as large cap names that have international footprints currently.

Infosys Ltd. (8.86%), Reliance Industries Ltd. (8.80%), Oil & Natural Gas Corporation Ltd. (4.59%), Housing Development Finance Corp Ltd. (4.51%), and Tata Consultancy Services Ltd. (3.57%) make up the top five holdings in this index of one hundred sixty eight individual names. Being these are June options trading in EPI, it is possible that investors want protective exposure going into the next quarterly earnings season as well.

Year to date, flows in EPI have appeared heavy, as more than $160 million has left the fund via redemptions despite the recent up-trend in price. EPI is the largest India focused product in the ETP landscape currently, but that does not mean that other targeted products should not be in focus here currently as well.

Eyes are on INDA (iShares MSCI India ETF, Expense Ratio 0.65%), which has quietly raised nearly $500 million in AUM since its February 2012 inception as well as INDY (iShares S&P India Nifty 50 Index, Expense Ratio 0.93%), PIN (PowerShares India Portfolio, Expense Ratio 0.81%), INP (iPath MSCI India Index ETN, Expense Ratio 0.89%), SCIF (Market Vectors India Small Cap, Expense Ratio 0.91%), INXX (EGShares India Infrastructure, Expense Ratio 0.85%), SCIN (EGShares India Small Cap, Expense Ratio 0.85%), SMIN (iShares MSCI India Small Cap, Expense Ratio 0.74%), and INCO (EGShares India Consumer, Expense Ratio 0.89%) for example.

Also, for aggressive traders and short term directional type strategies, INDL (Direxion Daily India Bull 3X Shares, Expense Ratio 0.95%) is listed, but there is no corresponding “Short/Inverse” ETF offered by Direxion currently.

WisdomTree India Earnings Fund

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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