India Small-Cap Index ETF (NYSEARCA:SCIF)
This ETF is also a small cap centric fund and follows the Market Vectors India Small-Cap Index. Madras Cements, Apollo Tyres and Jain Irrigation Systems occupy the top three positions in the basket with a combined 9% of assets.
With respect to sector holdings, consumer discretionary and financials take the top two spots at 23.7% and 23.6%, respectively, while industrials (18.3%) and IT (12%) round out the top four positions.
The ETF invests about $251.4 million in assets in 89 stocks and trades in volume of nearly 140,000 million shares a day, suggesting some extra cost in the form of a tight bid/ask spread beyond the expense ratio of 0.93%. SCIF is up about 11.8% post results and about 38% this year. SCIF has a Zacks ETF Rank of 3 or ‘Hold’ rating with a medium risk outlook.
EGShares India Infrastructure Index Fund (NYSEARCA:INXX)
This fund provides exposure to the growing infrastructure corner of the broad Indian market by tracking the Indxx India Infrastructure Index. Holding 31 stocks in its basket, the fund allocates higher to Bharat Heavy Electrical, Tata Steel and Larsen & Tubro with a combined 20% share. From an industry look, industrials take the top spot with 45%, closely followed by utilities (21%), basic materials (11.2%), and telecom (10.6%).
The fund has accumulated just $22.1 million in its asset base and trades in small volume of 30,000 shares a day on average. Expense ratio came in at 0.85%. Though INXX is unpopular, illiquid and expensive, the product has gained about 13.8% post-election results and 34% year to date. The ETF has a Zacks ETF Rank of 3 with a medium risk outlook.
While the market will likely remain strong in the coming months as the hoped-for drivers have fallen into place, corrections are quite likely in this bloated phase. Investors will definitely try to book profits sometimes in the coming days.
Thus, one needs to be hawk-eyed while remaining invested in India. Narendra Modi’s first budget – slated for presentation in the first week of July – will decide the fate or fortunes of the Indian market.
After that event, India ETFs will surely take a new turn – be it upward or downward. Till then, these afore-mentioned ETFs could be in focus and worth a closer look by investors.
This article is brought to you courtesy of Zacks.com