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Is WisdomTree India Earnings ETF (EPI) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree India Earnings ETF (EPI - Free Report) debuted on 02/22/2008, and offers broad exposure to the Asia-Pacific (Emerging) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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
Managed by Wisdomtree, EPI has amassed assets over $762.74 million, making 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.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.84% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 6.27%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 7.65% of the fund's total assets, followed by Tata Steel Ltd (TATA) and Infosys Ltd .
Its top 10 holdings account for approximately 38.66% of EPI's total assets under management.
Performance and Risk
The ETF has lost about -4.08% so far this year and is down about -8.53% in the last one year (as of 03/21/2023). In the past 52-week period, it has traded between $29.42 and $37.79.
The fund has a beta of 0.72 and standard deviation of 22.84% for the trailing three-year period, which makes EPI a medium risk choice in this particular space. With about 418 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 $564.20 million in assets, iShares MSCI India ETF has $4.43 billion. INDY has an expense ratio of 0.89% 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?
A smart beta exchange traded fund, the WisdomTree India Earnings ETF (EPI - Free Report) debuted on 02/22/2008, and offers broad exposure to the Asia-Pacific (Emerging) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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
Managed by Wisdomtree, EPI has amassed assets over $762.74 million, making 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.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.84% for this ETF, which makes it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 6.27%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 7.65% of the fund's total assets, followed by Tata Steel Ltd (TATA) and Infosys Ltd .
Its top 10 holdings account for approximately 38.66% of EPI's total assets under management.
Performance and Risk
The ETF has lost about -4.08% so far this year and is down about -8.53% in the last one year (as of 03/21/2023). In the past 52-week period, it has traded between $29.42 and $37.79.
The fund has a beta of 0.72 and standard deviation of 22.84% for the trailing three-year period, which makes EPI a medium risk choice in this particular space. With about 418 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 $564.20 million in assets, iShares MSCI India ETF has $4.43 billion. INDY has an expense ratio of 0.89% 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.