india etfs

Executive Summary

  • One of the world’s fastest growing economies
  • Domestic economy is in good shape as heavy infrastructure investment and rising incomes drive consumption
  • Exports of IT services and business process outsourcing will outpace any slow down in exports of goods
  • Ways to invest with Exchange Traded Products:

Equity ETN: INP

Equity ETFs: EPIPIN

Currency ETN (Rupee): ICN

Investment case

Track Record of Strong Growth and Disciplined Policy

Over the past five years, average growth in excess of 8 percent has made India one of the world’s fastest-growing economies.

The rapid growth has reduced the poverty rate from 36 percent in 1994 to less than 28 percent in 2005.

Over the same time period, India’s sound macroeconomic policies and structural reforms have kept inflation contained and the current account deficit moderate.

Domestic Investment and Growth

According to the International Monetary Fund, the outlook for India remains positive. Rising incomes should support consumption growth, and robust business confidence, high capacity utilization, and buoyant corporate profits will bolster investment.

Mixed Trading Trends

Slowing growth of India’s key trading partners is likely to slow merchandise export growth in the near term. However, India’s service exports, including IT and business process outsourcing, could benefit from increased demand as industrial economies look to cut costs.

Long Term Positive Outlook

Over the next few years, growth is likely to moderate toward its potential rate of 8 percent, buttressed by favorable demographics and robust productivity gains.

 

Overview

Two types of exchange-traded products provide exposure to India: ETNs and ETFs.

The iPath® MSCI India Index ETN (INP) tracks the MSCI India Total Return Index that measures the performance of 68 companies listed on the National Stock Exchange of India. Top index components include Reliance Industries, Infosys Technologies and ICICI Bank.

An ETN is a senior, unsubordinated, unsecured debt security issued by Barclays Bank.

The WisdomTree India Earnings Fund (EPI) tracks a fundamentally weighted index of 146 Indian companies that are profitable and eligible for purchase by foreign investors

The PowerShares India Portfolio(PIN) is based on the Indus India Index which tracks the performance of 50 Indian domiciled companies across the information technology, health sciences, financial services, heavy industry, and consumer products segments.

A recently launched Indian Rupee ETN gives investors a low cost way to quickly gain exposure to the movement in the dollar-rupee exchange rate.

Van Eck Global’s Market Vectors Indian Rupee-USD ETN (ICN) is based on the S&P Indian Rupee Total Return Index. Total return means that interest earned on funds deposited are reinvested rather than distributed.

 

Top Performers

Largest Equity ETN

iPath MSCI India Index ETN (INP) – $634 million

Largest Equity ETF

WisdomTree India Earnings Fund (EPI) – $261 million

Largest Currency ETN

WisdomTree Dreyfus Indian Rupee Fund
(ICN) – $14 million

See the directory.