Sector Weight Changes and Measures of Potential Rupee Sensitivity

In the trailing 12 months prior to the rebalance date (September 20, 2013), India’s equities as measured by the WisdomTree India Earnings Index (WTIND) delivered returns of -13.2%. Given that the rupee declined more than 14% over this period, the currency move explains the Index decline.

But there were big divergences among sectors that led to shifts in sector weights at the rebalance. One factor that was important in explaining the sector performance was each sector’s sensitivity to the currency, so in the below analysis we list those sector correlations.

Analysis of Sector Changes in Weight and Rupee Sensitivity

1 As of 9/20/2013, before rebalance weights went into effect.
2 Performance of specified sector from 9/21/2012 to 9/20/2013.
3 As of 9/20/2013, after rebalance weights went into effect.
4 From 8/31/2010 to 8/31/2013.

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