This India ETF has some attractive components

India is one of the emerging markets with the best performance this year. That increased by almost 23% year-to-date WisdomTree India Earnings ETF (NYSE: EPI) proves so much.

This contrasts with a decline in the MSCI Emerging Markets Index of 5.57%. EPI’s upward trend this year versus other emerging market single country listed funds confirms methodology and equity holdings are important.

EPI methodically follows the WisdomTree India Earnings Index. This is a fundamentally weighted index that only contains profitable companies that foreign investors can buy. The EPI components are weighted according to the results of the previous financial year. With respect to equity holdings, some EPI components have received rave reviews from some research firms. Jefferies, for example, has been positive about several EPI member firms.

Jefferies is optimistic about ICICI Bank – one of the largest private lenders in India. Analysts have set a price target of Rs 1,000 for the stock, a potential uptrend of about 38.5% from the last close of trading. The bank also likes Housing Development Finance Corporation and has a target price of Rs 3,480 on the stock. That’s almost 27% more than Friday’s closing price, ”reports Eustance Huang for CNBC.

Housing Development and ICICI Bank are EPI’s second and fourth largest holdings, respectively, and together make up over 8% of the ETF list. Jefferies’ top pick among Indian stocks is ICICI Prudential Life Insurance Company, a smaller member of the EPI range.

“Jefferies sees the greatest upside potential for ICICI Prudential Life Insurance. The investment bank has a buy rating on ICICI Prudential Life Insurance with a target price of 830 rupees – more than 40% above Friday’s closing price, ”said CNBC.

In the Indian energy sector, Jefferies likes Reliance Industries. This is the largest position from EPI with a weight of 7.53%. According to issuer data, the financial services and energy sectors account for almost 42% of EPI’s weight. Most of Jefferies’ favorite ideas for Indian stocks come from these two sectors.

EPI’s fourth largest sector weighting is technology at 13.34%, suggesting the fund has some leverage in an increasingly dynamic tech and internet company in Asia’s third largest economy – one that is growing due to a record number of initial public offerings (IPOs). .

It is thanks to EPI that it beats the MSCI India Index by more than 500 basis points this year.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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