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Is WisdomTree India Earnings ETF (EPI) a Strong ETF Right Now?
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The WisdomTree India Earnings ETF (EPI - Free Report) was launched on 02/22/2008, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Emerging) ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $2.91 billion, making 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
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.
Annual operating expenses for EPI are 0.85%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.14%.
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 8.19% of the fund's total assets, followed by Hdfc Bank Limited (HDFCB) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 38.26% of EPI's total assets under management.
Performance and Risk
The ETF has added about 7% and is up roughly 36.09% so far this year and in the past one year (as of 04/16/2024), respectively. EPI has traded between $32.04 and $44.87 during this last 52-week period.
EPI has a beta of 0.78 and standard deviation of 16% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 477 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.
Franklin FTSE India ETF (FLIN - Free Report) tracks FTSE INDIA CAPPED INDEX and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. Franklin FTSE India ETF has $975.16 million in assets, iShares MSCI India ETF has $9.35 billion. FLIN has an expense ratio of 0.19% and INDA charges 0.65%.
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?
The WisdomTree India Earnings ETF (EPI - Free Report) was launched on 02/22/2008, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Emerging) ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $2.91 billion, making 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
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.
Annual operating expenses for EPI are 0.85%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.14%.
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 8.19% of the fund's total assets, followed by Hdfc Bank Limited (HDFCB) and Icici Bank Ltd (ICICIBC).
Its top 10 holdings account for approximately 38.26% of EPI's total assets under management.
Performance and Risk
The ETF has added about 7% and is up roughly 36.09% so far this year and in the past one year (as of 04/16/2024), respectively. EPI has traded between $32.04 and $44.87 during this last 52-week period.
EPI has a beta of 0.78 and standard deviation of 16% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 477 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.
Franklin FTSE India ETF (FLIN - Free Report) tracks FTSE INDIA CAPPED INDEX and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. Franklin FTSE India ETF has $975.16 million in assets, iShares MSCI India ETF has $9.35 billion. FLIN has an expense ratio of 0.19% and INDA charges 0.65%.
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.