India Fund Report: Positive Week (EPI)

Christian Magoon: India fund products gained ground for the most part last week. Most ETFs gained a bit less than 1% with the largest India fund, the WisdomTree India Earnings ETF (NYSEARCA:EPI) gaining close to one third of one percent. Here’s the entire India ETF list from IndiaETFs.com sorted by one week performance.

india etf report

India fund products were mostly positive for the week.

INDIA FUND CHALLENGES

India has been trying to balance the need to cut interest rates with potential inflation challenges in the food and oil sector. Although inflation rates have moderated in general, inflation is still fairly high at just above 6.8%. For the Reserve Bank of India (RBI), India’s central bank and interest rate policy decision maker, that level is still too high to join a variety of emerging markets by cutting interest rates. In a recent Bloomberg interview, RBI Deputy Governor Subir Gokarn said:

“We have both oil and food as pressure points that have re-emerged” Gokarn said in a question and answer session after a speech to the Forex Association of India.“We cannot ignore that risk,” he said. “If we do, there is a likelihood of inflation resurging very quickly and requires even more aggressive action. That’s not the scenario we want to take a chance on.”

This dilemma has led to a slowing of GDP growth in India as businesses and consumers face hefty interest rates of 8% plus in order to access money. Accordingly, GDP grew only 5.3% in the last year over year official measurement in March.

Adding to the pressure on the India economy is the decline in the value of the rupee, which has lost about 18% of its value versus the U.S. Dollar over the last year. This currency devaluation has been caused by a stronger U.S. Dollar in light of EU fears and an Indian economy and debt profile that has been moving backward.

Despite all these challenges, India fund investors have experienced gains this year. Here’s the year to date India fund performance grid snapshot.

india etf performance

India fund investors are mostly positive this year despite many risks.

Written By Christian Magoon From Magoon Capital

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.”

Leave a Reply

Your email address will not be published. Required fields are marked *