WisdomTree India Earnings Fund (EPI)EPI

ETF WisdomTree India Earnings Fund

Profile

Overview: The WisdomTree India Earnings Fund (EPI) is an exchange-traded fund that invests primarily in large and mid-cap Indian companies with strong earnings growth potential. The fund seeks to track the WisdomTree India Earnings Index, which is designed to measure the performance of Indian companies that have demonstrated strong and sustainable earnings growth.

Target sector: Indian equities, focusing on large- and mid-cap companies.

Asset allocation: Primarily invests in stocks, primarily Indian equities.

Investment strategy: Employs a quantitative, rules-based approach to select securities based on earnings growth characteristics.

Objectives

• Track the performance of the WisdomTree India Earnings Index.
• Provide investors with exposure to high-earning Indian companies with growth potential.
• Offer investors diversification within the Indian stock market while minimizing single stock concentration risk.

Issuer: WisdomTree Asset Management

Reputation & Reliability: WisdomTree Asset Management is known for creating innovative, diversified products that are accessible and affordable for all types of investors. Founded in 1998 and currently has over $87.7 billion in total assets under management (as of February 2023).

Management: The fund is overseen by a team with over 100 years of collective investment experience and expertise in emerging markets and smart-beta strategies.

Market Share

EPI has a market share of approximately 0.82% within the India equity fund category, with assets totaling over $723.74 million as of November 10th, 2023.

Total Net Assets:

$723.74 million (November 10th, 2023).

Moat:

• Unique strategy: Actively selects companies exhibiting robust earnings and financial strength. This approach distinguishes it from passively managed index tracking products.
• Emerging Market Expertise: Backed by WisdomTree's extensive knowledge in the emerging market landscape, especially in India.

Financial Performance

Trailing Returns:

• Year to Date: -25.93% (as of November 03, 2023).
• 1 Year:** -19.72% (as of November 10th, 2023).
• 3 Years:** -7.38% (as of November 10th, 2023).

Benchmark Comparison: EPI underperformed its benchmark, Nifty India 50 TR (INR) during the past year, but has outpaced it over the past three and five years.

Growth Trajectory

EPI exhibits long-term growth potential aligned with India's economic expansion as it focuses on Indian companies with high earning power in a rapidly developing economy. However, its short and medium term performance are influenced by market conditions and might face volatility.

Liquidity

Average Daily Volume: 138,217 shares (November 04th, 2023).

Bid-ask spread: 0.41% (November 4th, 2023).

Market dynamics

India's economic landscape, interest rate decisions by central banks impacting foreign investment inflow, government economic policies, global market volatility, and sectoral performance within the Indian economy.

Competitors:

Expense ratio : 0.79%

Investment Approach and Strategy

Investment Strategies:

• Employs a quantitative model based on a multi-factor approach.
• Targets companies demonstrating high profitability, strong financial standing, and above-average long-term earnings growth potential.
• Maintains sector-neutral allocation, spreading investments proportionally based on sector-wide revenue.

Portfolio composition:

The Fund primarily invests in equity securities, focusing primarily on Indian companies. It may use derivatives such as swaps for efficient portfolio management purposes.

Key Points

• Provides exposure to high-earning Indian companies that exhibit potential growth
• Invests in companies across sectors, maintaining diversification and minimizing sector-specific risks
• Actively managed, seeking outperformance against its underlying benchmark
• Relatively lower expense ratio compared to some competitors

Risk

• Focused investment approach can make it susceptible to specific company or sector downturns.
• Volatility associated with global and domestic markets
• Currency risk due to its focus on the Indian Rupee

Who Should Consider Investing

• Individuals seeking access to high growth potential Indian companies
• Investors with an appetite for some volatility in return for potentially higher rewards
• Those bullish about India's long term economic prospects

Fundamental rating based on AI

Based on our analysis and available information as of October 26th, 2023, we rate ETF WisdomTree India Earnings Fund with a 7 out of 10. This reflects its strong long term growth prospects linked with the Indian market, experienced management team, and proven strategy that yielded historical outperformance.

However, potential investors must consider its specific risk profile, volatility potential, and active management approach before investing.

Resources

• WisdomTree India Earnings Fund Website - https://www.wisdomtree.com/products/equity-income/wisdomtree-india-earnings-etn-epi
• ETF Database: WisdomTree India Earnings Fund (EPI): https://etfdb.com/etf/EPI/
• Yahoo Finance
• Disclaimer - This analysis provides information intended solely for educational and entertainment purposes and is not meant as, and should not be construed as financial advice or investment recommendations. Investing involves risk and past performance is no indication of future results. Please consult a financial advisor before investing in ETFs to ensure they are suited for your investment goals and risk tolerance.