India ETF Funds Bounce On Reserve Bank of India Hopes (EPI, INDY, PIN, SCIN, INCO, INXX, SCIF, INDL)
Christian Magoon: India ETF Funds Start Positive: India ETF funds started the week with a bounce as hopes of an interest rate cut from the Reserve Bank of India (RBI) are being revived. The RBI’s next meeting is June 18th and markets are beginning to believe more liquidity, in the form of an interest rate cut, could come. Accordingly India ETF funds traded up nicely on Monday. Here’s the one day performance snapshot from IndiaETFs.com.
Tickers Listed: EG Shares India Small Cap ETF (NYSEARCA:SCIN), EG Shares India Consumer ETF (NYSEARCA:INCO), EG Shares India Infrastructure ETF (NYSEARCA:INXX), WisdomTree India Earnings ETF (NYSEARCA:EPI), Market Vectors India Small Cap ETF (NYSEARCA:SCIF), Direxion Daily India Bull 3X Shares (NYSEARCA:INDL), iShares MSCI India Index (NYSEARCA:INDA), iPath MSCI India Index ETN (NYSEARCA:INP), iShares MSCI India Small Cap (NYSEARCA:SMIN), iShares S&P India Nifty 50 Index (NYSEARCA:INDY), PowerShares India (NYSEARCA:PIN), Direxion Daily India Bear 3X Shares (NYSEARCA:INDZ).
According to Reuters, Tuesday’s market action in India saw a continued move upward despite a variety of global and internal developments that will occur over the coming days. Globally, there is a G7 meeting to address the EU debt crisis today and an auction of Spanish sovereign debt on Thursday that could potentially send the EU crisis to another level of intensity. Internally, upcoming inflation and production numbers will be released before the RBI’s policy meeting. Disappointing numbers could stall any interest rate decrease.
India ETF Funds On A Bumpy Ride
Stepping back and reviewing the last year of market action via two prominent ETFs -the WisdomTree India Earnings Fund (NYSEARCA:EPI) and the iShares S&P India Nifty Index Fund (NYSEARCA:INDY) – shows that this bounce could just be a technical reaction to reaching lows not seen since December of 2011. Indeed, those December lows were followed by a rocket ride upward for close to two months on better internal Indian developments and a calmer Europe. Perhaps traders are speculating that another large rally is about to happen as it does appear that Indian markets are at an inflection point. Here’s the one year chart of EPI and INDY fromstockcharts.com.
Despite the substantial downturn in the outlook for India and Indian stocks, a variety of India ETFs have still managed to generate positive returns year to date. Most of these funds had such large appreciation in the first two months of the year that the recent decline has still not pushed them into negative territory. Here’s the list of all India ETF products with a positive return in 2012. To view the entire India ETF list click here.
Christian Magoon is Publisher of GoldETFs.biz and IndiaETFs.com. He is also CEO of Magoon Capital, a strategic consultant firm to asset managers. Christian Magoon is an ETF insider, having launched over 40 ETFs in the United States to date. A widely recognized thought leader on finance and market issues, Christian regularly contributes to many financial media outlets. Prior to forming Magoon Capital in 2010, Christian was President of Claymore Securities (now Guggenheim Investments), where he built one of the fastest growing and most innovative ETF businesses in the country, gathering more than $3 billion in AUM in three years. He launched more than 40 ETFs, introducing many “firsts” to the U.S. market, including the first Frontier Markets, Sector Rotation, Solar Energy, Timber, BRIC and suite of China focused ETFs. Christian consistently provides his industry insights and knowledge as a commentator in the U.S. media speaking publicly on macro investment issues and ETF related topics. Follow him on Twitter@ChristianMagoon. In 2008, he was named by Institutional Investor News as one of the five people to watch in the U.S. ETF marketplace. In 2011, Financial Planning magazine dubbed Christian an “ETF Pioneer.”