ETF Trends
ETF Trends

A recent end to India’s dry spell could have something brewing for the coffee exchange traded note (ETN).

Wait, what? Yes, we said India. Among the coffee-producing countries in Asia, India is the third-largest.

A drought last month threatened to lower coffee yields, but rains have rejuvenated hopes, reports Thomas Kutty Abraham for Bloomberg. Rain in the last month is said to be so good that it’s nearly wiped out the deficit. The country’s coffee exports rose 6.4% in the first seven months of the year as producers shipped more to nations such as Russia and Italy.

The stepped up production may have an impact on the iPath DJ AIG Coffee Total Return Sub-Index ETN (JO), which launched on June 24. It’s down 4% since then, but is trading higher today.

Meanwhile, the Sensex Index rose to its highest point in six weeks, led by banks, reports Pooja Thakur for Bloomberg. In particular, ICICI Bank, the country’s second-largest lender by assets, rose the most since July 23.

Sectors sensitive to interest rates, including banks, autos and real estate, are up on hopes that oil prices will continue to fall, says one analyst.

Two India-related ETFs launched this year, and they could benefit on the index’s strength:

  • WisdomTree India Earnings (EPI): down 22.9% since Feb. 26 inception; 7% financials; ICICI is 3.2%
  • PowerShares India (PIN): down 16.5% since March 5 inception; 10.9% financials; ICICI is 1.4%

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.