If the saying “There’s always a bull market somewhere” is accurate, this year’s bull market among the BRIC nations is India.
India is home to the top-performing BRIC equity market this year and as a result, the WisdomTree India Earnings Fund (NYSEArca: EPI), the largest India ETF, is higher by 2.4%. Not a jaw dropping gain, but one that is superior to popular diversified emerging markets ETFs. With emerging markets ETFs this year, gains are gains. EPI can boast of that while the iShares China Large-Cap ETF’s (NYSEArca: FXI), iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) and the Market Vectors Russia ETF (NYSEArca: RSX) are each saddled with unfortunate 2014 performances. [Emerging Markets Stocks Losing Prestige]
Over the past 90 days, EPI and the iShares India 50 ETF (NasdaqGM: INDY) have traded higher while the aforementioned BRIC funds have each lost ground. Examining India’s strength relative to the broader emerging markets complex indicates stocks in Asia’s third-largest economy could be poised for further upside after flailing in 2013 due to rampant inflation, a plunging rupee and widening account deficit.
“It looks to me like India is the big winner relative to the whole Emerging Markets space. Here is the pure price action showing India bumping up against a major downtrend line from 2010. Just like in the relative chart, I think that false breakdown last year could be the catalyst to really send this one higher,” writes Eagle Bay Capital President J.C. Parets.