Today in our ETF/Index options recap we highlight near term at-the-money put buying in the second largest India Equity based ETF, EPI (WisdomTree India Earnings, Expense Ratio 0.83%), specifically with trading interest in the August 22.50 strikes.
EPI has had a tough trailing one month in terms of flows, losing nearly $200 million to redemptions lately, but its asset base is still above $2.4 billion. INDA (iShares MSCI India, Expense Ratio 0.68%) is the largest India based equity fund in the U.S. listed landscape, with nearly $4 billion in AUM ($3.95 to be exact), and INDA has actually net attracted assets in the trailing one month period (+$28 million via creations).
Year to date, EPI has fared better than recently in terms of flows, net pulling in more than $260 million via creation activity, but it seems that it may be caught in the greater headwinds of Emerging Markets volatility here and thus is attracting put buyers.
If we look at say the MSCI Emerging Markets Index, we see that India has an 8% weighting, basically in line with South Africa and making it the fourth largest single country weighting in the index itself. To put this in perspective, China has approximately a 22% weighting in this index as its largest single country member.
When we break down EPI further, we see fairly even weights across the top three holdings in the underlying index, with Reliance Industries (8.57%) standing as the largest holding, Infosys Ltd (8.22%) coming in second, and Housing Development Finance Corp Ltd. (8.01%) as the third largest weighting. After those three there is a bit of a drop-off as ICICI Bank Ltd. (4.09%) is the fourth largest holding, followed by Tata Consultancy Services Ltd. (3.45%).
From a sector standpoint, Financial Services carries the largest weighting at about 26%, followed by Technology which has an 18% allocation and Energy with a 15% weighting. Consumer Discretionary at 9% and Basic Materials at 8% rank next in terms of sector exposure.