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Big Action in India ETFs as Economy Expands

editor@etftrends.com (ETF Trends)

Up more than 28% year-to-date, the iShares MSCI India ETF (INDA) is one of this year's best-performing emerging markets single-country exchange traded funds. INDA, also one of the largest India ETFs trading in the U.S., recently saw some interesting activity. New Delhi projects India’s economy could expand between 6.75% and 7.5% in 2017-18 as the government shifts tactics on its economy. India, Asia's third-largest economy, is one of the best-performing countries in the MSCI Emerging Markets Index this year. “Equity investors pulled the largest single-day amount in two years from the main US exchange-traded fund focusing on India. That didn’t stop traders from cutting bearish bets on the ETF to the lowest level since February 2015,” reports Bloomberg . The iShares MSCI India ETF (INDA) , PowerShares India Portfolio (PIN) and the WisdomTree India Earnings ETF (EPI) have also notched impressive performances this year. India’s market suffered a blow at the end of 2016 after Prime Minister Narendra Modi yanked about 86% of all cash from the economy to fight so-called black money to fight back against the huge shadow economy. While the economy may experience a short-term setback from the move, the results of demonetization could usher in long-term benefits to the economy. “Markit data on the iShares MSCI India ETF shows a section of the market remains bullish on equities even as Asia’s third-biggest economy grows at the slowest pace since 2014 and valuations hover near a nine-year high. Traders have extinguished about $130 million of bearish bets on the $5.2 billion fund since March, data compiled by Bloomberg show,” according to Bloomberg. Related: 3 Surging India ETFs, Driving Developing Markets Resurgence INDA holds almost 80 stocks, 23.6% of which hail from the financial services sector. A quarter of the ETF's combined weight is allocated to software and consumer discretionary companies. Energy and materials names combine for 22% of the fund's roster. “Investors pulled $68 million from the fund on Aug. 31 as escalating tensions between North Korea and the US sparked a risk-off tone. The S&P BSE Sensex Index has risen 19 percent this year and trades at 18.6 times projected earnings. India’s gross domestic product rose 5.7 percent in April-June from a year earlier, missing economists’ estimates,” reports Bloomberg. More aggressive investors who are confident about India may even look to a leveraged bullish play on Indian markets. The Direxion Daily India Bull 3X Shares (INDL) , which takes the 3x or 300% daily performance of Indian stocks. For more information on Indian markets, visit our India category . Read more on ETFtrends.com