In perhaps a significant indication of investor dissatisfaction with China, India investing has picked up some notable interest in 2023. China, of course, has disappointed since coming out of its “Zero COVID” regime. Geopolitics, hesitant consumers, and a looming debt situation have all suppressed interest in China. That, and a growing case for India, has helped the India ETF (EPI ), the WisdomTree India Earnings Fund, see its AUM rise by almost $1 billion over the last year.
So, what’s behind that big AUM jump for the India ETF? Per VettaFi data, the $987 million increase has stemmed from both fund flows and price influence, however, flows have contributed the bigger part. Indeed, EPI has added $802 million over the last year, with the vast majority arriving since July. It added nearly $90 million on two separate one-week periods in the last few weeks, too.
The Case for an India ETF
So what part of the India investment case is adding to EPI interest? Recent projections by S&P Global suggest that the broader Asia-Pacific growth story may shift away from China and toward South Asia. With China’s GDP growth slowing down, India’s looks set to near 7% next year.
So why EPI, itself, then, as a route into the India growth story? EPI tracks the WisdomTree India Earnings Index, which sets it apart from other market cap-weighted approaches to India. For an 84 basis point (bps) charge, that gives investors a nice alternative for those who want India exposure but to firms that may be more nimble.
EPI has performed well this year with that approach, returning 21.3% YTD, far outpacing its ETF Database Category and FactSet Segment Averages. What’s more, that follows one, three, and five-year periods with more than 10% returns for the India ETF. For those investors looking for a burgeoning alternative to China ETFs, India ETF EPI may provide one appealing option.
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