Monday, February 25, 2008

Two New India ETFs

Two new India-focused ETFs have come to market. The WisdomTree India Earnings Fund (EPI) began trading last Friday with over one million shares in volume the first day. The PowerShares India Portfolio (PIN) is expected to launch tomorrow.

Including about 150 stocks, the WisdomTree India Earnings Index has a dividend yield of 1.24% and a PE ratio of 13.99. The top five companies represented in the ETF are Reliance Industries Ltd. (13.35%), Oil and Natural Gas Corp. Ltd. (6.27%), Infosys Technologies Ltd. (INFY) (5.78%), Bharti Airtel Ltd. (3.93%) and ICICI Bank Ltd. (IBN) (3.32%). Energy is the largest sector in the index at 24.88%.

The 0.88% expense ratio of the Wisdom Tree ETF (EPI) is cheaper than equivalent closed ended funds such the Blackstone India Fund (IFN) with a 1.23% expense ratio or Morgan Stanley’s India Investment Fund (IIF) with a 1.30% fee.

Investors should avoid the iPath MSCI India ETN (INP) whose issuance remains suspended due to problems with India's foreign capital restrictions. The new ETF products have been designed to meet these requirements and avoid the type of trouble experienced with the iPath MSCI India ETN.

A whitepaper from WisdomTree about the EPI Exchange Traded Fund outlines this new product in more detail.

3 comments:

Anonymous said...

I do not see PIN trading yet. Or any announcement as to when their expected trading date is. Do you have a source on that launch date?

GregB said...

The original press release said mid-late February - http://www.marketwire.com/mw/release.do?id=815591&sourceType=3

Other press listed the date as February 26th. I don't see it listed today either. It appears to be late.

GregB said...

Update - PIN started trading on March 5th.