A List Of The Top Ten (10) India ETFs For Investors (INP, SCIF, INDY, PIN, FNI, EEB)

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August 26, 2011 1:49pm NASDAQ:INDY NYSE:EEB

David Fry:  Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive.


 The result is a more manageable list of issues from which to view and make selections.

India remains one of the world’s fastest growing economies that also happens to be a democracy. The middle class continues to expand and western developed continues continue to outsource many jobs to the country. Like other fast growing economies when growth becomes too hot inflation issues rise to the surface. When this happens equity markets tend to become volatile and may suffer more than with other developed markets. With higher betas (volatility) you tend to always to see outperformance on the upside but the opposite when conditions deteriorated. The country’s demographics argue for good consumer opportunities as well as high infrastructure improvements. The Indian government owing to its socialist past continues to move forward but is still often constrained by the entrenched bureaucracy.

India has been a more difficult sector with which to create new products making pure ETF choices more difficult to find. We’re featuring those choices that are available along with multinational ETFs with heavy India exposure.

We’re not ranking these ETFs favoring one over another so don’t let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it’s not our intention to recommend one over another.

Our technical analysis methodology involves using, where possible, monthly charts with enough data to allow investors to stay on the right side of the 12 month moving averages. Further, when market prices move too far above or below this moving average investors can assume a correction in the other direction will eventually take place. In this regard caution is advised.

Direxion Shares offers inverse and leveraged long ETFs for those investors wishing to hedge or speculate.

Data as of January 2011

EPI Top Ten Holdings & Weightings

  1. Reliance Industries Ltd. (RELIANCE): 12.42%
  2. Infosys Ltd (EQINFY): 6.17%
  3. Oil & Natural Gas Corporation Ltd. (ONGC): 4.49%
  4. Bharti Airtel Ltd. (BHARTIARTL): 4.29%
  5. Housing Development Finance Corporation Ltd. (HDFC): 3.21%
  6. ICICI Bank Ltd (ICICIBANK): 2.97%
  7. Tata Consultancy Services Ltd. (TCS): 2.92%
  8. State Bank of India (SBIN): 2.58%
  9. HDFC Bank Ltd (500180): 2.17%
  10. ITC Ltd. (ITC): 2.00%

Barclays iPath India ETN (NYSE:INP) follows the MSCI Total Return Index which represents 85% of the free-float-adjusted market capitalization of equities by industry group within India. The fund was launched in December 2006. The expense ratio is .89%. AUM equal $622 million and average daily trading volume is 88K shares. As of mid-August 2011 the annual dividend was not available and YTD return -11.34%.

Data as of August 2011

INP Top Ten Holdings & Weightings

  1. Reliance Industries Ltd. (RELIANCE): 12.97%
  2. Infosys Technologies, Ltd. (EQINFY): 10.11%
  3. ICICI Limited (ICICIBANK): 6.27%
  4. Housing Development Finance Corporation Ltd. (HDFC): 5.40%
  5. HDFC Bank, Ltd. (500180): 4.53%
  6. Tata Consultancy Services Ltd. (TCS): 3.00%
  7. Larsen & Toubro Limited (LT): 2.98%
  8. Sterlite Industries (India), Ltd. (STER): 2.98%
  9. Oil & Natural Gas Corporation Ltd. (ONGC): 2.86%
  10. ITC Ltd. (ITC): 2.61%

EG Shares India Small Cap ETF (NYSE:SCIN) follows the INDXX India Small Cap Index which is a free float market capitalization weighted index of 75 companies in the small cap India sector. The fund was launched in July 2010. The expense ratio is .85%. AUM equal $37 million and average daily trading volume is 23K shares. As of mid-August 2011 the annual dividend was $.02 making the current yield .13% and YTD return of -12%.

Data as of August 2011

SCIN Top Ten Holdings Weightings

  1. Dish TV India Ltd. (DISHTV): 3.72%
  2. Hexaware Technologies Ltd. (HEXAWARE): 3.26%
  3. Amtek Auto Ltd. (AMTEKAUTO): 2.55%
  4. Chambal Fertilisers & Chemicals Ltd. (CHAMBLFERT): 2.33%
  5. Indian Bank (INDIANB): 2.32%
  6. McLeod Russel India Ltd. (MCLEODRUSS): 2.31%
  7. Mangalore Refinery and Petrochemicals Ltd. (MRPL): 2.25%
  8. Central Bank of India (CENTRALBK): 2.22%
  9. Havells India Ltd. (HAVELLS): 2.21%
  10. Arvind Ltd. (ARVIND): 2.16%

Van Eck India Small Cap ETF (NYSE:SCIF) follows the Market Vectors India Small Cap Index which is proprietary and measures what it determines as small cap equities generating most of their revenues from India. The fund was launched in August 2010. The expense ratio is .85%. AUM equal $62 million and average daily trading volume is 45K shares. As of mid-August 2011 the annual dividend was unavailable and YTD return -22%.

Data as of August 2011

SCIF Top Ten Holdings & Weightings

  1. Sintex Industries Ltd. (SINTEX): 3.58%
  2. IFCI Ltd. (IFCI): 3.35%
  3. Punj Lloyd Limited (PUNJLLOYD): 2.95%
  4. Core Projects & Technologies Ltd. (COREPROTEC): 2.62%
  5. India Infoline Ltd. (INDIAINFO): 2.49%
  6. Era Infra Engineering Ltd. (ERAINFRA): 2.20%
  7. South Indian Bank Ltd. (SOUTHBANK): 2.16%
  8. Hexaware Technologies Ltd. (HEXAWARE): 2.12%
  9. Gujarat NRE Coke Ltd. (GUJNRECOKE): 2.07%
  10. Sujana Towers Ltd. (532887): 1.94%

iShares India Nifty 50 ETF (NYSE:INDY) follows the S&P CNX Nifty Index which includes the 50 largest India stocks. The fund was launched in November 2009. The expense ratio is .89%. AUM equal $200 million and average daily trading volume is 98K shares. As of mid-August 2011 the annual dividend was $.01 making the current yield .03% and YTD return -16.75%.

Data as of August 2011

INDY Top Ten Holdings & Weightings

  1. Reliance Industries Ltd. (RELIANCE): 8.50%
  2. Infosys Ltd (EQINFY): 8.14%
  3. ICICI Bank Ltd. (ICICIBANK): 7.33%
  4. ITC Ltd. (ITC): 6.79%
  5. Larsen & Toubro Limited (LT): 5.65%
  6. Housing Development Finance Corporation Ltd. (HDFC): 5.53%
  7. HDFC Bank, Ltd. (500180): 5.38%
  8. State Bank of India (SBIN): 3.75%
  9. Tata Consultancy Services Ltd. (TCS): 3.52%
  10. Bharti Airtel Ltd. (BHARTIARTL): 3.25%

PowerShares India ETF (NYSE:PIN) follows the Indus India Index, which is intended to track the India market as a whole but includes 50 companies which represent all sectors. The fund was launched in March 2008. The expense ratio is .78%. AUM equal $430 million and average daily trading volume is 510K shares. As of mid-August 2011 the annual dividend was unavailable and YTD return -17%.

Data as of August 2011

PIN Top Ten Holdings & Weightings

  1. Infosys Ltd (EQINFY): 9.93%
  2. Reliance Industries Ltd. (RELIANCE): 9.28%
  3. Oil & Natural Gas Corporation Ltd. (ONGC): 7.73%
  4. Hindustan Unilever Ltd. (HINDUNILVR): 4.21%
  5. Tata Consultancy Services Ltd. (TCS): 4.03%
  6. HDFC Bank, Ltd. (500180): 4.00%
  7. Bharti Airtel Ltd. (BHARTIARTL): 3.96%
  8. NTPC Ltd. (NTPC): 3.44%
  9. Indian Oil Corporation Ltd. (IOC): 3.02%
  10. Wipro, Ltd. (WIPRO): 2.92%

EG Shares India Infrastructure ETF (NYSE:INXX) follows the INDXX India Infrastructure Index which is includes the leading 30 companies involved construction, engineering and utilities to name a few. The fund was launched in November 2010. The expense ratio is .85%. AUM equal $81 million and average daily trading volume is less than 20K shares. As of mid-August 2011 the annual dividend yield was unavailable and YTD return -20%.

Data as of August 2011

INXX Top Ten Holdings & Weightings

  1. Bharti Airtel Ltd. (BHARTIARTL): 7.20%
  2. Idea Cellular Ltd. (IDEA): 5.81%
  3. Tata Power Co., Ltd. (TATAPOWER): 5.79%
  4. GAIL India Ltd. (GAIL): 5.74%
  5. Sterlite Industries (India), Ltd. (STER): 5.66%
  6. NTPC Ltd. (NTPC): 5.20%
  7. Tata Motors, Ltd. (TATAMOTORS): 5.16%
  8. Larsen & Toubro Limited (LT): 5.11%
  9. Siemens Ltd. (SIEMENS): 5.03%
  10. Bharat Heavy Electricals Ltd. (BHEL): 4.42%

EG Shares India Consumer ETF (NYSE:INCO) follows the INDXX India Consumer Index which naturally follows consumer related stocks listed on the Bombay and National Stock Exchange. The fund was launched in August 2011. The expense ratio is .89%. AUM equal $2 million and trading volume is just too new to rate. Given the newness of the ETF there really is little to say about it at this time. Naturally with a high population and rapidly growing middle class the demographics suggest this sector should provide good long-term returns.

First Trust Chindia ETF (NYSE:FNI) follows the ISE Chindia ETF which consists of 50 ADRs and or stocks of companies domiciled in China or India. The fund was launched in May 2007. The expense ratio is .60%. AUM (Assets under Management) equal $130 million and average daily trading volume is 48K shares. As of mid-August 2011 the annual dividend was $.05 making the current yield .22% and YTD return -9.50%.

Data as of August 2011

FNI Top Ten Holdings & Weightings

  1. Baidu, Inc. ADR (BIDU): 7.63%
  2. HDFC Bank Ltd ADR (HDB): 7.14%
  3. ICICI Bank Ltd ADR (IBN): 7.08%
  4. China Mobile Ltd. ADR (CHL): 6.96%
  5. Infosys Ltd ADR (INFY): 6.85%
  6. CNOOC, Ltd. ADR (CEO): 6.61%
  7. SINA Corporation (SINA): 4.41%
  8. Ctrip.com International, Ltd. ADR (CTRP): 4.03%
  9. PetroChina Company, Ltd. ADR (PTR): 4.02%
  10. Sterlite Industries (India), Ltd. ADR (SLT): 3.86%

Guggenheim BRIC ETF (NYSE:EEB) follows the Bank of NY Mellon BRIC Select ADR which includes India with Russia, India and China. We’ve featured this in other related sectors but with the absence of other available India-based ETFs include it here. The fund was launched in September 2006. The expense ratio is .60%. AUM equal $633 million and average daily trading volume is 95K shares. As of mid-August 2011 the annual dividend was $51 making the current yield 1.30% and YTD return -12.10%.

Data as of August 2011

EEB Top Ten Holdings & Weightings

  1. Petroleo Brasileiro SA Petrobras ADR (PBR.A): 7.93%
  2. Vale S.A. ADR (VALE.P): 7.27%
  3. Petroleo Brasileiro SA Petrobras ADR (PBR): 6.79%
  4. China Mobile Ltd. ADR (CHL): 6.33%
  5. Vale S.A. ADR (VALE): 5.13%
  6. Itau Unibanco Holding SA ADR (ITUB): 4.55%
  7. Bank Bradesco ADR (BBD): 4.21%
  8. CNOOC, Ltd. ADR (CEO): 4.15%
  9. AmBev ADR (ABV): 3.79%
  10. PetroChina Company, Ltd. ADR (PTR): 3.10%

ETF choices from India will continue to expand but perhaps at a slower pace than in other countries owing to stiffer regulatory burdens. For example, futures trading and short selling are still frowned upon by authorities. Any new offerings may seem seductive but may need seasoning before investors can verify performance trends and validate investing in them. We’ve chosen to feature some that may be repetitive but clearly have something to offer as well. Some other Top 10 lists we’ve published may have similar ETFs within them and can become duplicative but we’ll just have to live with this on occasion.

One thing seems clear when viewing many of these ETFs are similar trend patterns many have presented. This is primarily due to globalization but also is the result of easy monetary conditions throughout the developed world allowing for higher levels of correlation.

For further information about portfolio structures using this or other ETFs see http://www.etfdigest.com/.

(Source for holding data is from ETF Database and from various sponsors.)

Written By David Fry From ETF Digest 

David is founder and publisher of ETF Digest and best selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management published by Wiley Finance in 2008.  In July of 2009, Fry was named in the ETF Hall of Fame as one of the Top 25 people who revolutionized the ETF industry and guided ETF investing from its conception to widespread acceptance among all breeds of investors. Fry founded the ETF Digest in 2001 and was among the very first to see the need for an online publication that provided individual investors and financial professionals with trading tools, market information and actionable advice on ETF investing.  ETF Digest was recently ranked 9th in the Top 100 ETF websites from Alexa on exchange traded funds. Dave Fry has devoted over 35 years to the business of trading and portfolio management. He is registered as an arbitrator with the Financial Industry Regulatory Authority (FINRA) and the National Futures Association (NFA).


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