We highlight put buying in EPI (WisdomTree India Earnings, Expense Ratio 0.83%) yesterday, specifically with action in the December 21.50 strikes. The fund has seen about $51 million vacate in the month of December thus far via redemption activity, but EPI still maintains an edge as the largest India Equity focused ETF in the U.S. listed marketplace with about $2.1 billion in assets under management.
INDA (iShares MSCI India, Expense Ratio 0.67%) has made a strong case for its legitimacy in the space in 2014, pulling in an impressive $1.3 billion (inception was February 2012) and nearly eclipsing the $2 billion mark. The 21.50 puts are already in the money with EPI trading as low as $20.72 this morning and we have to think the tragic terror attack in neighboring Pakistan is potentially weighing on the market as well.
Other notables in the rather robust “India Equity” category include INDY (iShares S&P India Nifty 50, Expense Ratio 0.93%, $780 million in AUM), PIN (PowerShares India Portfolio, Expense Ratio 0.82%, $531 million in AUM), INP (iPath MSCI India Index ETN, Expense Ratio 0.89%, $348 million in AUM), and SCIF (Market Vectors India Small Cap, Expense Ratio 0.93%, $279 million in AUM) to name the largest funds in terms of asset sizes.
Direxion offers a leveraged Daily “Bull” product in INDL (Direxion Daily India Bull 3X Shares, Expense Ratio 0.95%) but the “Bear” offering was delisted some time ago unfortunately.
The ETF provider EGShares offers three India specific alternatives in this space as well in INXX (EGShares India Infrastructure, Expense Ratio 0.85%, SCIN (EGShares India Small Cap, Expense Ratio 0.85%), and INCO (EGShares India Consumer, Expense Ratio 0.89%) and iShares launched a Small Cap focused counterpart to INDA at the same time INDA launched in 2012 in SMIN (iShares MSCI India Small Cap, Expense Ratio 0.74%).
If we refocus back to EPI in terms of exposures and why the fund may be getting hit so hard lately along with the greater EM space, we see that Energy makes up about 16% of the overall portfolio (Financial Services is the heaviest weighting at about 25%), as compared to INDA’s 10.5% weighting to energy.
We see top end sector exposures to INDA in Technology (>23%) and Financial Services (>17.4%). In terms of bearish looking flows in EPI lately, it is very possible that holders that are conscious of “over-weights” in Energy have bailed out amid falling Crude Oil prices recently that have rippled throughout the Emerging Markets space with a vengeance lately.
WisdomTree India Earnings Fund
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