ETFs
Indian ETFs to Soar Following Modi’s Likely Victory
The Indian stock market is banking on the expectation of a strong victory for the Narendra Modi-led alliance in the recently concluded general elections. Exit polls suggest Modi is likely to return for a record third term. Polls predict the Bharatiya Janata Party (BJP)-led alliance will secure more than 303 seats in the 543-member lower house and will likely secure a two-thirds majority – enough to initiate amendments to the constitution.
In fact, the NSE Nifty 50 index rose 3.6% to a record high at the time of writing on optimism, while the S&P BSE 500 index jumped 3.9%. , its biggest intraday gain since February 2021, to reach an all-time high. .
A landslide victory would allow Modi’s party to pass crucial policies to boost India’s economy, already among the world’s fastest-growing economies. The victory would reignite foreign investors’ enthusiasm for the nation’s $4.7 trillion stock market, which briefly overtook Hong Kong this year to become the world’s fourth-largest stock market.
India’s economic growth accelerated to 8.2% in the fiscal year ended March, driven by government spending on infrastructure and a real estate boom, according to the latest data.
As a result, we’ve highlighted five ETFs that should gain on optimism (see: all emerging Asia Pacific ETFs here).
iShares MSCI India ETF (INDIA)
The iShares MSCI India ETF provides exposure to large and mid-cap stocks in India by tracking the MSCI India Index and charging 65 basis points in fees per year to investors. Holding 147 stocks in its basket, the fund has key exposure to the financials, consumer discretionary, information technology and energy sectors.
The iShares MSCI India ETF is the largest and most popular ETF in this space, with assets under management of $10.2 billion and an average trading volume of 4.4 million shares per day. It has a Zacks ETF Rank #3 (Hold) with a Medium Risk Outlook (Read: Embracing ETFs to Capture India’s Growth Momentum).
WisdomTree India Income Fund (EPI)
WisdomTree India Earnings Fund seeks to provide investors with exposure to profitable companies in the Indian stock market by tracking the WisdomTree India Earnings Index. It holds 475 securities in its basket, none of which represents more than 7.6% of assets. From a sector perspective, financials, energy, materials and information technology each have double-digit exposure.
WisdomTree India Earnings Fund has assets under management of $3.3 billion and charges 85 basis points in fees per year. It trades an average daily volume of 830,000 shares and has a Zacks ETF Rank #3 with a Medium Risk Outlook.
Franklin FTSE India ETF (FLIN)
The Franklin FTSE India ETF targets exposure to large and mid-sized companies in India and tracks the FTSE India Capped Index. It holds 229 stocks in its basket, none of which represents more than 7.4% of assets. FLIN has broad exposure to financials with a 23.8% share, while consumer discretionary, energy, industrials and information technology each receive double-digit exposure.
The Franklin FTSE India ETF has amassed $1.1 billion in its asset base and charges 19 basis points in annual fees. It trades an average daily volume of 197,000 shares. FLIN Has a Zacks ETF Rank #2 (Buy)
iShares MSCI India Small-Cap ETF (SMIN)
The iShares MSCI India Small-Cap ETF provides exposure to the small-cap segment of the broad Indian stock market by tracking the MSCI India Small Cap Index. He holds a well-diversified portfolio of 501 stocks, with no one accounting for more than 4.7% of the shares. Here, industrial stocks dominate the fund’s portfolio with a quarter share, while financials, materials, consumer discretionary and healthcare round out the next three spots with double-digit exposure each.
The iShares MSCI India Small-Cap ETF has $906.3 million in assets under management and trades in an average daily volume of 250,000 shares. It charges 79 basis points in annual fees and has a Zacks ETF Rank #3 with a High Risk Outlook (Read: 6 Reasons to Mine Indian ETFs Now: 4 Low P/E Picks).
iShares India 50 ETF (INDY)
The iShares India 50 ETF provides exposure to the 50 largest Indian stocks by tracking the Nifty 50 index. It has a concentration problem in the top three stocks which collectively account for a 29.2% share, while the rest do not. represent no more than 5% of assets. When it comes to sectors, financials take first place with 33.9%, followed closely by energy (12.5%) and information technology (12.2%).
iShares India 50 ETF manages assets worth $867.6 million and trades a good volume of almost 67,000 million shares per day. It’s an expensive pick in the space, charging 89 basis points in annual fees and sporting a Zacks ETF Rank #3 with an Average Risk Outlook.
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WisdomTree India Earnings ETF (EPI): ETF Research Reports
iShares MSCI India ETF (INDA): ETF Research Reports
iShares India 50 ETF (INDY): ETF Research Reports
iShares MSCI India Small-Cap ETF (SMIN): ETF Research Reports
Franklin FTSE India ETF (FLIN): ETF Research Reports