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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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $1.08 billion, which makes it one of the larger ETFs in the Asia-Pacific (Emerging) ETFs. Before fees and expenses, EPI seeks to match the performance of the WisdomTree India Earnings Index.
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 EPI, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Reliance Industries Ltd (RIL) accounts for about 6.70% of the fund's total assets, followed by Tata Steel Ltd (TATA) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 31.09% of EPI's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree India Earnings ETF has added about 10.37% so far, and is up about 9.80% over the last 12 months (as of 08/11/2023). EPI has traded between $30.30 and $36.58 in this past 52-week period.
The ETF has a beta of 0.72 and standard deviation of 17.45% for the trailing three-year period, making it a medium risk choice in the space. With about 417 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 $654.15 million in assets, iShares MSCI India ETF has $6.01 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?
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $1.08 billion, which makes it one of the larger ETFs in the Asia-Pacific (Emerging) ETFs. Before fees and expenses, EPI seeks to match the performance of the WisdomTree India Earnings Index.
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 EPI, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Reliance Industries Ltd (RIL) accounts for about 6.70% of the fund's total assets, followed by Tata Steel Ltd (TATA) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 31.09% of EPI's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree India Earnings ETF has added about 10.37% so far, and is up about 9.80% over the last 12 months (as of 08/11/2023). EPI has traded between $30.30 and $36.58 in this past 52-week period.
The ETF has a beta of 0.72 and standard deviation of 17.45% for the trailing three-year period, making it a medium risk choice in the space. With about 417 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 $654.15 million in assets, iShares MSCI India ETF has $6.01 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.