New ETF To Track India (WSDT, IIF, IFN, INP, EPI)

WisdomTree Investments (WSDT-OTC) made a fairly significant announcement yesterday for those who trade ETF’s.  The ETF manager is going to launch an ETF in the latter part of February that tracks the Indian stock market, one of the larger emerging markets that is not exactly the easiest for Americans and non-Indians to invest in.

This will have the proposed tick of "EPI" on the NYSE.  What is most interesting is that it is said to be an "earnings weighted ETF" and it will offer pure exposure to local Indian securities rather than just the US-listed ADR securities.  This will also be more of an open-ended fund so that its assets will actually fluctuate more in-line with the underlying securities as opposed to swinging at wider premiums or discounts to the net asset values that closed-end funds and some ETF’s encounter.

EPI will select from a broad universe of approximately 150 profitable companies included in the WisdomTree India Earnings Index on the annual index screening date. EPI will be listed on the NYSE Arca.  You can access the full release here.

The current major ETF that traders use is the iPath MSCI India Index ETN (NYSE: INP) or traders go to the closed end fund called the India Fund, Inc. (NYSE: IFN) or the Morgan Stanley India Investment Fund, Inc. (NYSE: IIF). 

This may offer investors a chance to invest in a broader basket of Indian shares without the added volatility that can be caused from the premium and discount to net asset values.  Now we just have to wait about 5 or 6 weeks to see how well it works and how active the trading is.

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Jon C. Ogg
January 24, 2008