ETF Trends
ETF Trends

Like most emerging market economies, market participants spent most of 2013 and the first two months of 2014 lamenting poor performance and seemingly dismal future prospects.

But turn the clock forward to April of 2014 and there is all of a sudden a ton of positive price momentum in the EM space in general, including single country ETFs such as those invested in India.

India makes up about 6.6% of the MSCI Emerging Markets Index and is the sixth largest single country weighting (behind the likes of China, South Korea, Taiwan, Brazil, and South Africa) and the country has been out-performing the broader EM proxy impressively in the trailing one year period.

EPI (WisdomTree India Earnings, Expense Ratio 0.83%) is the largest ETF dedicated to the Indian equity market, with about $944 million in assets under management currently. EPI debuted back in 2008, but iShares’ INDA (MSCI India Index, Expense Ratio 0.65%) is within shouting distance in terms of AUM, having gathered about $708 million since its 2012 inception.

We have recently seen some near term spring month put buying in EPI, which given the country’s strong equity rally over the past two months makes sense for those fortunate to still have long positions in their portfolios in terms of locking in gains in the case of a pullback.

EPI options do not trade on a notable daily basis, but it is safe to say that we may see an institutional block or two several times a month in the product that is worth taking note and perhaps examining further.

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