Making Money Alert
ETF Talk: India Shows Tiger-Like Strength
02/08/2012
After the precipitous fall of the emerging markets during the second half of last year, many exchange-traded funds (ETFs) devoted to those countries are coming back twice as fast. India, in particular, is one of the best-performing stock markets in the world so far this year. Year-to-date, India’s stock market has returned nearly 14%. What also has helped boost prices in India has been an appreciating Indian rupee. The rise of the rupee specifically has fueled the returns of Indian ETFs. For example, WisdomTree India Earnings Fund (EPI) is one of the top-performing ETFs year-to-date with nearly a 30.7% return.
The fund seeks investment results that correspond to the price and yield performance, before fees and expenses, of the WisdomTree India Earnings Index. EPI is the first ETF I have found that invests exclusively in India, one of the world’s fastest-growing economies.
Within this ETF, the financial services sector makes up nearly 25.99% of its holdings. Banking continues to be one of the top growth sectors in India, since many of the people there still do not use banks. As India’s economy continues to expand and its middle class grows, more people will be using banks for the first time. As a result, banking has been a boom sector of late and there still is room to grow. It is clear that India, the home of the most Bengal tigers of any country in the world, is showing strength so far in 2012 that is worthy of the big cat.
As investors from around the world are watching returns from the developed economies diminish, they are looking toward developing markets such as India