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Is WisdomTree India Earnings ETF (EPI) a Strong ETF Right Now?
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Designed to provide broad exposure to the Asia-Pacific (Emerging) ETFs category of the market, the WisdomTree India Earnings ETF (EPI - Free Report) is a smart beta exchange traded fund launched on 02/22/2008.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $984.88 million, which makes it one of the larger ETFs in the Asia-Pacific (Emerging) ETFs. This particular fund seeks to match the performance of the WisdomTree India Earnings Index before fees and expenses.
WisdomTree India Earnings Index is a fundamentally weighted index that measures the performance of companies incorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors as of the index measurement date. Weighted Index based on their earnings in their fiscal year prior to the Index measurement date adjusted for foreign investors.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.84% for this ETF, which makes it one of the most expensive products in the space.
EPI's 12-month trailing dividend yield is 0.84%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Infosys Ltd accounts for about 7.51% of the fund's total assets, followed by Housing Development Finance Co (HDFC) and Reliance Industries Ltd (RIL).
Its top 10 holdings account for approximately 36.93% of EPI's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree India Earnings ETF has added roughly 29.61% so far, and is up about 61.86% over the last 12 months (as of 11/02/2021). EPI has traded between $23.96 and $39.26 in this past 52-week period.
The fund has a beta of 0.80 and standard deviation of 27.13% for the trailing three-year period, which makes EPI a medium risk choice in this particular space. With about 351 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree India Earnings ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Emerging) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares India 50 ETF (INDY - Free Report) tracks Nifty 50 Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. IShares India 50 ETF has $768.25 million in assets, iShares MSCI India ETF has $6.37 billion. INDY has an expense ratio of 0.90% and INDA charges 0.69%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Emerging) ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is WisdomTree India Earnings ETF (EPI) a Strong ETF Right Now?
Designed to provide broad exposure to the Asia-Pacific (Emerging) ETFs category of the market, the WisdomTree India Earnings ETF (EPI - Free Report) is a smart beta exchange traded fund launched on 02/22/2008.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $984.88 million, which makes it one of the larger ETFs in the Asia-Pacific (Emerging) ETFs. This particular fund seeks to match the performance of the WisdomTree India Earnings Index before fees and expenses.
WisdomTree India Earnings Index is a fundamentally weighted index that measures the performance of companies incorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors as of the index measurement date. Weighted Index based on their earnings in their fiscal year prior to the Index measurement date adjusted for foreign investors.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.84% for this ETF, which makes it one of the most expensive products in the space.
EPI's 12-month trailing dividend yield is 0.84%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Infosys Ltd accounts for about 7.51% of the fund's total assets, followed by Housing Development Finance Co (HDFC) and Reliance Industries Ltd (RIL).
Its top 10 holdings account for approximately 36.93% of EPI's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree India Earnings ETF has added roughly 29.61% so far, and is up about 61.86% over the last 12 months (as of 11/02/2021). EPI has traded between $23.96 and $39.26 in this past 52-week period.
The fund has a beta of 0.80 and standard deviation of 27.13% for the trailing three-year period, which makes EPI a medium risk choice in this particular space. With about 351 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree India Earnings ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Emerging) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares India 50 ETF (INDY - Free Report) tracks Nifty 50 Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. IShares India 50 ETF has $768.25 million in assets, iShares MSCI India ETF has $6.37 billion. INDY has an expense ratio of 0.90% and INDA charges 0.69%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Emerging) ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.