The Dominance of India ETFs

ETFtrends.com
June 17, 2014

At this point, the story is widely known. When it comes to single-country exchange traded funds tracking the largest developing economies, including the BRIC quartet, India funds have been dominant this year.

Dominant regarding both performance and asset-gathering proficiency. The WisdomTree India Earnings Fund (EPI) entered Tuesday with a year-to-date gain of 32.6%, far and away the best 2014 performance among the four major BRIC single-country ETFs. [India ETF Nears Big Rally]

Affirming the performance gap between large-cap India ETFs are these factoids. EPI has outperformed the iShares MSCI Brazil Capped ETF (EWZ) , the next best large-cap country-specific BRIC fund, by better than two-to-one. The average year-to-date return for the PowerShares India Portfolio (PIN) , the iShares MSCI India ET (INDA) and the iShares India 50 ETF (INDY) is more than 1,000 basis points above EWZ.

Gains for Indian equities have been largely attributed to the landslide victory for Hindu nationalist Narendra Modi in the country’s recent national election. However, India has been the best-performing equity market among the 10 largest emerging economies since December 2011, report Rajhkumar K. Shaaw and Santanu Chakraborty for Bloomberg.

Even with that and the stellar performance of Indian stocks this year, there could be much more to come. The current rally “s still 26 percentage points shy of the average Indian bull market during the past 30 years and the Sensex’s valuation is still about 28 percent below its all-time high set in 2007,” according to Bloomberg.

The rally has encompassed if not been stoked by small-caps. The Market Vectors India Small-Cap Index ETF (SCIF) , EGShares India Small Cap Fund (SCIN) and the iShares MSCI India Small-Cap ETF (SMIN) are up 59%, 48.5% and 43%, respectively, year-to-date. [Small-Caps Shine After India Election]

The Market Vectors Brazil Small-Cap ETF (BRF) is up just 7% this year while the Guggenheim China Small Cap Index ETF (HAO) has traded lower.

Speaking of China, stocks in the world’s second-largest economy deserve some credit for rallying in recent weeks. Since the start of the second quarter, the iShares China Large-Cap ETF (FXI) is up almost 6%.

Problem is, investors have not really seemed to care. A year after it was one of the 10 worst ETFs in terms of lost assets, FXI has lost almost $540 million just in the quarter. That compares to $476 million gained by EPI. [Unloved Rally for China ETFs]

In just the past month, PIN, the PowerShares India fund, has hauled in almost $51 million, or roughly 10% of its current assets under management, according to issuer data.

WisdomTree India Earnings Fund

epi
epi