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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
EPI is managed by Wisdomtree, and this fund has amassed over $2.52 billion, which makes it one of the largest 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.
The 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.85% for this ETF, which makes it one of the most expensive products in the space.
EPI's 12-month trailing dividend yield is 0.14%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Reliance Industries Ltd (RIL) accounts for about 7.87% of the fund's total assets, followed by Hdfc Bank Limited (HDFCB) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 39.08% of EPI's total assets under management.
Performance and Risk
The ETF has gained about 6.61% and was up about 36.53% so far this year and in the past one year (as of 02/12/2024), respectively. EPI has traded between $30.87 and $44.03 during this last 52-week period.
The ETF has a beta of 0.79 and standard deviation of 16.37% for the trailing three-year period, making it a medium risk choice in the space. With about 480 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 MSCI India Small-Cap ETF (SMIN - Free Report) tracks MSCI India Small Cap Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. IShares MSCI India Small-Cap ETF has $792.83 million in assets, iShares MSCI India ETF has $8.21 billion. SMIN has an expense ratio of 0.74% and INDA charges 0.64%.
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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
EPI is managed by Wisdomtree, and this fund has amassed over $2.52 billion, which makes it one of the largest 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.
The 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.85% for this ETF, which makes it one of the most expensive products in the space.
EPI's 12-month trailing dividend yield is 0.14%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Reliance Industries Ltd (RIL) accounts for about 7.87% of the fund's total assets, followed by Hdfc Bank Limited (HDFCB) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 39.08% of EPI's total assets under management.
Performance and Risk
The ETF has gained about 6.61% and was up about 36.53% so far this year and in the past one year (as of 02/12/2024), respectively. EPI has traded between $30.87 and $44.03 during this last 52-week period.
The ETF has a beta of 0.79 and standard deviation of 16.37% for the trailing three-year period, making it a medium risk choice in the space. With about 480 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 MSCI India Small-Cap ETF (SMIN - Free Report) tracks MSCI India Small Cap Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. IShares MSCI India Small-Cap ETF has $792.83 million in assets, iShares MSCI India ETF has $8.21 billion. SMIN has an expense ratio of 0.74% and INDA charges 0.64%.
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.