On Thursday, WisdomTree bolstered its ETF lineup with the release of the WisdomTree India Hedged Equity Fund (INDH). The fund is trading on the NASDAQ.
INDH is benchmarked to the WisdomTree India Hedged Equity Index and seeks to match the index in yield performance and price. The fund has a net expense ratio of 0.63%.
“While India’s strong economic growth and stock market performance have led to an uptick in investor interest, emerging market investors understand increased performance potential does not protect against fluctuations of the Indian Rupee,” noted Jeremy Schwartz, WisdomTree Global Chief Investment Officer. “We’re excited to launch INDH, which combines WisdomTree’s long-standing currency hedging expertise with the increased interest in hedging exposure in the Indian market.”
The index utilizes a multi-factor screening process to choose 75 companies to invest in. Eligible companies must incorporate in India and the Bombay Stock Exchange must list them. Additionally, the companies need at least $200 million in float-adjusted market cap and median daily dollar trailing volume of $200k or more across the last six months. Lastly, companies also need a trading volume of 250k or more shares per month for the last half-year.
Through tracking the index, the fund provides exposure to some of the biggest large-cap companies within the Bombay Stock Exchange. WisdomTree notes that the fund overweights the energy and material sectors. The fund also provides robust exposure to the financial and information technology sectors.
This exposure pairs with a hedging strategy in order to reduce risk from the Indian rupee’s fluctuations in comparison to the U.S. dollar. To do so, the fund utilizes currency forward and currency futures contracts.
India’s Momentum
INDH comes online amid a good opportunity to invest in Indian companies. In the last of quarter of 2023, the Indian economy grew by 8.4%. WisdomTree adds that the MCI India Index outperformed many peers in the global market. It posted a 9.7% annual return over the last decade.
WisdomTree has over 75 ETFs listed in the United States. In total, these funds possess over $78 billion in assets under management.
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