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India ETF Assets Tumble in Performance Rout

tlydon@globaltrend.com (Tom Lydon)

Investors are pulling money from exchange traded funds benchmarked to India amid a sell-off in the country’s equity and currency markets.

The largest India-related ETFs listed around the globe have shed nearly 20% of their assets in the past two months, DNA reports.

“The redemption pressures, which have had a bearing on how markets have behaved in recent times, are fairly clear. Investors’ risk appetite has been waning on account of global issues, more so for Indian equities. The India story and the country’s economic stability are being questioned by foreign investors,” Saurabh Mukherjea, head of equities at Ambit, said in the article.

According to Bloomberg data, the assets under management of about five of the largest India focused ETFs have dropped to about $2.8 billion from $3.4 billion. [ ETF Chart of the Day: India ]

The outflows have accelerated recently, according to the report. [ India ETFs Slammed; Rupee hits Low Against Dollar ]

India’s markets have lost about 10% over the past two months while the rupee has also yielded significant ground.

Analysts are not expecting a turnaround for India anytime soon. The global growth slowdown and the European debt crisis are still lingering in the background and will keep Indian shares anchored until they are resolved. [ Biggest Losers: Global ETFs that are Down in the Dumps ]

Some India-related ETFs:

  • WisdomTree India Earnings (NYSEArca: EPI - News ) is down 38% year to date.
  • PowerShares India Portfolio ETF (NYSEArca: PIN - News )
  • iShares S&P India Nifty 50 index fund (NYSEArca: INDY - News )
  • WisdomTree Dreyfus Indian Rupee Fund (NYSEArca: ICN - News )

WisdomTree India Earnings

Tisha Guerrero contributed to this article.