India exchange traded funds, the top performers this year among single-country BRIC funds, are prodigiously gathering new assets.
In anticipation of and following last month’s landslide victory for Hindu nationalist Narendra Modi in the country’s national election, India ETFs have seen new assets come pouring in. “ETFs have invested $1.5 billion in India in the past three months leading up to May, which is the highest among its peers such as China, Russia, Brazil and South Korea, the Economic Times reports, citing data from EPFR Global and Kotak Institutional Equities.
In the week ending June 6, investors poured nearly $111 million into the WisdomTree India Earnings Fund (EPI) , the largest U.S.-listed India ETF. EPI, which recently became the tenth WisdomTree ETF with over $1 billion in assets under management, now has over $1.45 billion in AUM. [10 WisdomTree ETFs Over $1B in AUM]
“The size of assets of the EPI speaks for itself and reflects the preferences of investors. In my opinion that ETF is a great proxy of the India market,” according to Emerging Equity. “Investors should keep in mind that India market is a beta plus game. India’s beta vs. the S&P 500 Index is well above 1.5 with some India ETF’s breaking the levels of 2.”
Since the start of the second quarter, EPI has added $300 million in new assets while the Market Vectors India Small-Cap Index ETF (SCIF) has gained $142 million, a sign the pre- and post-election rallies in Indian equities have been broad-based. Over 37% of SCIF’s current AUM total has come into the ETF just this quarter. Last Friday, every U.S.-listed hit new 52-week or all-time highs. [This Week's Most Searched ETFs]
Substantial inflows to India ETFs signal investors’ willingness to bet that Modi will be successful in damping inflation, reducing poverty and increasing infrastructure spending, top priorities for Asia’s third-largest economy.
Another India that has recently stout inflows is the PowerShares India Portfolio (PIN) . PIN has brought in $47.3 million in new assets over the past 90 days, making it the twelfth-best PowerShares ETF by that metric over that time, according to issuer data.
PIN’s largest sector allocation is an almost 27% weight to energy. A resurgent rupee helps on that front because India imports the bulk of its domestic energy needs. Although PIN is not a Sensex tracking ETF, the fund’s ability to be reflective of the Indian benchmark is important and legitimate.
At the end of last year, financial services, energy and technology names represented half of the Sensex. Those sectors combine for over 54% of PIN’s weight. [PIN-terest for an India ETF]
Market Vectors India Small-Cap Index ETF