“One reason for the decline of inflationary pressures in India is the declining price of oil. Plummeting global oil prices have been a windfall for oil-importing economies like India. Seventy percent of the oil used in India is imported, and oil makes up about 37% of the country’s total imports. About 67% of India’s trade deficit reflects crude oil purchases, so the Indian economy is uniquely positioned to benefit from lower crude oil prices. It’s no coincidence that the 50% drop in the price of oil since July 2014 has coincided with a decline in the rate of inflation in India,” said WisdomTree Chief Investment Office Luciano Siracusano III in a note last month.
With its 21.5% energy sector allocation, PIN has benefited from India’s falling oil import costs, but the fund has also benefited from a run-up in financial services and industrials. The ETF allocates a combined 16% of its weight to those sectors.
Investors are again showing a willingness to put new money to work with India ETFs. PIN has added $61.6 million in new assets this year while investors have poured $51 million into EPI. [U.S. Investors Love India ETFs]
WisdomTree India Earnings Fund