EPI: A Standout 'All-Cap' India Play

seekingalpha04-12

India has been among the best-performing equity markets over the last year.Within the passive universe, EPI ticks the right boxes for broad-based India exposure.Heading into a catalyst-rich next few ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2426029117?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1953750544/image_1953750544.jpg","is_english":true,"pubTime":"2024-04-12 03:02","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2426029117","market":"hk","top_or_hot":-1,"title":"EPI: A Standout 'All-Cap' India Play","media":"seekingalpha","content":"<div>\n<p>India has been among the best-performing equity markets over the last year.Within the passive universe, EPI ticks the right boxes for broad-based India exposure.Heading into a catalyst-rich next few ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683341-epi-a-standout-all-cap-india-play\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>EPI: A Standout 'All-Cap' India Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEPI: A Standout 'All-Cap' India Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-12 03:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4683341-epi-a-standout-all-cap-india-play><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>India has been among the best-performing equity markets over the last year.Within the passive universe, EPI ticks the right boxes for broad-based India exposure.Heading into a catalyst-rich next few ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683341-epi-a-standout-all-cap-india-play\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0528227936.USD","symbol_name":"富达环球人口趋势基金A-ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4683341-epi-a-standout-all-cap-india-play","article_id":"2426029117","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1953750544/image_1953750544.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2426029117","pubTimestamp":1712862154,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"India has been among the best-performing equity markets over the last year.Within the passive universe, EPI ticks the right boxes for broad-based India exposure.Heading into a catalyst-rich next few m","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0528227936.USD":"富达环球人口趋势基金A-ACC","LU0898667661.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD-H","BK4134":"信息科技咨询与其它服务","LU1854103824.USD":"M&G (LUX) POSITIVE IMPACT \"A\" (USD) INC","BK4207":"综合性银行","LU0890818403.SGD":"JPMorgan Funds - Emerging Markets Dividend A (mth) SGD-H","LU0791591158.USD":"ALLSPRING  EMERGING MARKTES EQUITY INCOME \"I\" (USD) ACC","IBN":"印度工业信贷投资银行","LU0541502299.USD":"ALLSPRING  EMERGING MARKETS EQUITY \"I\" (USD) ACC","LU0791590937.USD":"ALLSPRING  EMERGING MARKTES EQUITY INCOME \"A\" (USD)","LU0431992006.USD":"摩根大通新兴市场机会A（acc）","LU0390134368.USD":"FRANKLIN GLOBAL GROWTH \"A\" (USD) ACC","LU1366334651.USD":"ALLSPRING EMERGING MARKETS EQUITY INCOME \"I\" (USD) INC","LU0348816934.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (USD)","BK4548":"巴美列捷福持仓","FDN":"First Trust Dow Jones Internet I","LU0862451753.SGD":"JPMorgan Funds - Emerging Markets Dividend A (mth) SGD","LU0287143357.SGD":"Fidelity India Focus A-SGD","LU2279701549.SGD":"JPMorgan Funds - Emerging Markets Sustainable Equity A (acc) SGD","FLIN":"Franklin FTSE India ETF","LU1854104046.USD":"M&G (LUX) POSITIVE IMPACT \"A\" (USD) ACC","IE00B7N09G41.SGD":"柏瑞印度股票A5CP SGD","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","LU0197229882.USD":"富达印度焦点基金","PIN":"印度ETF-PowerShares","LU0231203729.USD":"富兰克林印度基金A (acc)","HDB":"HDFC银行","LU0348814723.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"A\" (USD) INC  NC","LU2177674079.SGD":"Fidelity Asia Pacific Opportunities A-ACC-SGD (hedged)","BK4523":"印度概念","BK4585":"ETF&股票定投概念","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0831103253.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD","BK4566":"资本集团","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","RLNIY":"Reliance Industries Ltd.","IE00B0JY6M65.USD":"PINEBRIDGE INDIA EQUITY \"A\" (USD) ACC","INFY":"印孚瑟斯","LU0456842615.SGD":"JPMorgan Funds - Emerging Markets Equity A (acc) SGD","LU1267930656.SGD":"FRANKLIN INDIA \"AS\" (SGD) ACC A","BK4535":"淡马锡持仓","PIN.AU":"PINCHme.com","LU0333810181.USD":"高盛印度股票组合Acc","LU0918141887.USD":"安联亚洲实际收益股票基金","LU0868486357.SGD":"JPMorgan Funds - Emerging Markets Opportunities A (acc) SGD-H","LU0536402901.SGD":"FTIF - Franklin India A (acc) SGD","BK4550":"红杉资本持仓","BK4588":"碎股","INDA":"iShares MSCI印度ETF〈INDA〉","LU0541501648.USD":"ALLSPRING  EMERGING MARKETS EQUITY \"A\" (USD) ACC"},"translate_title":"EPI：一部杰出的“全帽”印度剧","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RLNIY":1,"INFY":1,"INDA":1,"IBN":1,"HDB":1,"FLIN":1,"PIN":1,"PIN.AU":1,"FDN":0.9},"content_text":"India has been among the best-performing equity markets over the last year.Within the passive universe, EPI ticks the right boxes for broad-based India exposure.Heading into a catalyst-rich next few months, EPI should continue to outperform.sreeyashlohiya/iStock via Getty Images Through some rather intense global macro headwinds over the last year, India's fundamental growth story has continued unabated; the outperformance of WisdomTree India Earnings Fund ETF (NYSEARCA:EPI) since I last covered the ETF (see EPI: Still Room For Upside Heading Into India's Election Season) has been well-supported in this regard. Unlike most other markets though, India's rally has been led by small and mid-cap stocks rather than the large-caps - relative to the +30% one-year gain for its large-cap benchmark, the Nifty 50, the Nifty Midcap 100 and Nifty Smallcap 100 have returned an eye-popping +60% and +70%, respectively. Hence, the outperformance of the 'all-cap' approach adopted by EPI, which, in my view, strikes a nice balance between large-caps (73.7%) and small/mid-cap (26.3%) within its portfolio. The question, then, is whether 'all-cap' EPI will continue to work in light of concerns about valuations in both mid-caps and small-caps. A closer look at their respective earnings growth trajectories, however, shows that Indian stocks, whether in the large or small/mid-cap space, really aren't at all detached from their fundamentals. Edelweiss Finally, in addition to its 'all-cap' advantage, EPI also allocates based on a profitability filter; the result is that investors gain some added safety margin on quality and price (note the current ~18x portfolio P/E is four turns below the Nifty 50). All in all, with a catalyst-rich next few months on the horizon, EPI remains a great vehicle to capture India's equity upside. Data by YCharts EPI Overview - Still the Go-to Indian Factor ETF To recap, WisdomTree's India Earnings Fund is a fundamentally weighted index fund that filters its +550 India-listed holdings mainly based on a profitability 'factor' and foreign investor eligibility criteria. The rest of EPI's profile, including its 0.85% expense ratio, is largely intact - despite seeing its asset base nearly double to ~$3.0bn (up from ~$1.6bn when I last covered the ETF in Q4 last year). While this expense ratio remains at a slight premium to key 'factor' ETF alternative, Invesco India ETF (PIN), EPI makes up for it with a much narrower bid/ask spread (2bps vs. 22bps for PIN). Another key differentiator is its 'all-cap' profile (73.7% large-cap, 18.8% mid-cap, and 7.5% small-cap), which naturally comes with higher costs than tracking a pure-play large-cap index. WisdomTree EPI Portfolio - More Cyclical than Before; Levered to Upcoming Elections The portfolio has shifted a fair bit in recent months. Looking at the sector breakdown, Financials, historically the largest exposure, has been reduced to 22.7%. EPI's more cyclical sectors like Energy and Materials, on the other hand, have collectively gained portfolio share at 17.9% and 13.1%, respectively. Other key changes include Information Technology, down to 11.4% after a Q1 pullback, as well as Utilities and Industrials, both of which have been upsized to 8.6% and 8.1%, respectively. WisdomTree As for EPI's single-stock profile, the top four holdings, conglomerate Reliance Industries Ltd. (RLNIY), HDFC Bank Limited (HDB), ICICI Bank Limited (IBN), and tech services company Infosys Limited (INFY), are broadly unchanged. The notable changes are in the lower half of the top ten, with state-owned names like Oil & Natural Gas Corp Ltd (3.2%), Coal India (3.0%), and NTPC Limited (2.5%) now featuring prominently in EPI's portfolio after a big run-up in recent months. As many of these names are also potential election beneficiaries, the implication here is that this fund has a lot of torque to a market-friendly election outcome (i.e., a scenario where the incumbent government retains or expands its majority). WisdomTree EPI Performance - Setting up for Another Strong Year; Mind the Tracking Error Since its inception, EPI has consistently ranked highly within the India ETF universe. Performance has been especially strong over the last year at +38.1%, though even over longer five and ten-year timelines, the fund has compounded its underlying net asset value at very impressive +12.6% and 10.3% rates, respectively. By comparison, key factor ETF comparable PIN has lagged behind EPI over virtually all timelines, though the latter's small/mid-cap allocation means EPI also takes on more risk to achieve its higher returns. Also, worth noting is that both quality-focused funds have outperformed straightforward large-cap trackers like the iShares MSCI India ETF (INDA) and Franklin FTSE India ETF (FLIN) - more than making up for their higher expense ratios. WisdomTree Still, there are drawbacks to consider. The big one remains EPI's wide tracking error vs. the benchmark WisdomTree India Earnings Index it tracks. Last year's performance delta, for instance, was particularly wide at over seven percentage points (vs. two to three percentage points for PIN). A key reason is the hefty taxes India imposes on capital gains for foreign investors, though as the market price to NAV fluctuations shows, transaction costs, currency changes, and market accessibility play a part as well. The implication here is that investors should expect to give up a fair bit of gains, more so in bull markets like last year, via EPI's tracking error. WisdomTree Additionally, the fund's distributions are minimal, even by India ETF standards, at ~0.5% (per the 30-day SEC yield) and will likely stay that way if history is any indication. Instead, EPI remains a fund for the growth-oriented, particularly those with a 'growth at a reasonable price' lean. Note that EPI's profitability filter maintains much lower portfolio multiples than comparable ETFs - at current levels, EPI trades multiple turns below PIN and virtually every other India tracker at ~18x P/E and ~14x cash flow. WisdomTree Final Say: A Standout 'All-Cap' India Play  All things considered, EPI remains a great fund for those looking to buy the broadest, highest-quality cross-section of the Indian market. As its historical performance has shown, the EPI approach works, though, as I covered in the article, investors will want to be mindful of the drawbacks as well. Ahead of a catalyst-filled next few months, featuring a general election cycle, a major sovereign bond index inclusion, and potential policy rate cuts in the back half, EPI is well-placed to outperform.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2426029117"}