Best India ETFs for Q2 2022

SMIN, EPI, and GLIN are the best India ETFs for Q2 2022

India exchange-traded funds (ETFs) offer a way for investors to geographically diversify their global portfolios by owning a range of companies in the world’s second most populous nation and one of the world’s largest emerging markets. India ETFs track the performance of a basket of equities trading on the National Stock Exchange of India Ltd. (NSE). Some of India’s largest companies include Indian Oil Corp. Ltd. (IOC), Bharat Petroleum Corp. Ltd. (BPCL), and Tata Motors Ltd. (TATAMOTORS).

India has been significantly impacted by the COVID-19 pandemic. The country’s gross domestic product (GDP) fell by 7.3% in 2020, according to The World Bank. However, India has bounced back quickly in 2021. In the third quarter, India's economy was the fastest growing in the world, rising 12.7%. The spread of the Omicron variant of the coronavirus could slow the country's recovery but there are signs that cases of the illness due to Omicron started to peak in January.

Key Takeaways

  • Indian equities outperformed the broader market over the past year.
  • The India exchange-traded funds (ETFs) with the best one-year trailing total returns are SMIN, EPI, and GLIN.
  • The top holding of each of these funds is Voltas Ltd., Reliance Industries Ltd., and Infosys Ltd., respectively.

There are eight India ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). Note that these funds target Indian stocks rather than bonds. India-based equities, as measured by the MSCI India Index, have outperformed the broader market, with a total return of 20.2% over the past 12 months compared with the S&P 500’s total return of 18.6%, as of Feb. 3, 2022. The best-performing India ETF, based on performance over the past year, is the iShares MSCI India Small-Cap ETF (SMIN). We examine the top three India ETFs below. All numbers below are as of Feb. 3, 2022.

iShares MSCI India Small-Cap ETF (SMIN)

  • Performance Over One-Year: 33.8%
  • Expense Ratio: 0.81%
  • Annual Dividend Yield: 0.08%
  • Three-Month Average Daily Volume: 78,094
  • Assets Under Management: $410.0 million
  • Inception Date: Feb. 8, 2012
  • Issuer: BlackRock Financial Management

SMIN tracks the MSCI India Small Cap Index, which gauges the performance of small cap firms representing the bottom 14% of companies in India’s securities market. The ETF provides diversified exposure to small public companies in India. The fund’s portfolio is composed of several hundred equities. About half of the fund’s assets are concentrated in the materials, industrial, and financial sectors. SMIN follows a blended strategy, investing in a mix of growth and value stocks. The fund’s top three holdings are Voltas Ltd. (500575:BOM), an electronics company that makes home appliances and specializes in air conditioning and cooling technology; Tata Elxsi Ltd. (500408:BOM), a company focused on the design and development of computer hardware and software; and Zee Entertainment Enterprises Ltd., (505537:BOM), a media conglomerate that provides broadcasting services.

WisdomTree India Earnings Fund (EPI)

  • Performance Over One-Year: 22.3%
  • Expense Ratio: 0.84%
  • Annual Dividend Yield: 0.83%
  • Three-Month Average Daily Volume: 615,480
  • Assets Under Management: $968.1 million
  • Inception Date: Feb. 22, 2008
  • Issuer: WisdomTree

EPI tracks the WisdomTree India Earnings Index, a fundamentally weighted index that gauges the performance of profitable companies incorporated and traded in India and eligible to be purchased by foreign investors. The ETF provides a valuation-centric approach to India’s equity markets, weighting individual holdings by earnings rather than by market capitalization. It focuses on large cap companies across the Indian economy, with financial, energy, and materials companies accounting for more than half of invested assets. EPI’s top three holdings are Reliance Industries Ltd. (500325:BOM), a manufacturer of petrochemicals, synthetic fibers, textiles, and more; Infosys Ltd. (500209:BOM), a provider of IT consulting and software services; and Housing Development Finance Corp. Ltd. (500010:BOM), a provider of housing finance.

VanEck India Growth Leaders ETF (GLIN)

  • Performance Over One-Year: 19.0%
  • Expense Ratio: 0.82%
  • Annual Dividend Yield: 0.18%
  • Three-Month Average Daily Volume: 8,745
  • Assets Under Management: $74.5 million
  • Inception Date: Aug. 24, 2010
  • Issuer: VanEck

GLIN tracks the MarketGrader India All-Cap Growth Leaders Index, composed of companies with both growth potential and reasonable valuations. The market-cap-weighted ETF is composed mainly of large cap companies, but it has some exposure to mid and small cap companies as well. Information technology, materials, and healthcare companies account for more than three quarters of the fund’s holdings. While GLIN's primary focus is on growth stocks, it also screens for stocks with reasonable valuation characteristics. Its top three holdings are: Infosys; Tata Consultancy Services Ltd. (532540:BOM), an information technology services, consulting, and business solutions company; and Asian Paints Ltd. (500820:BOM), a manufacturer and marketer of paints and coating products.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources

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  2. World Economic Forum. "GDP is growing fastest in these countries - what it means." Accessed Feb. 7, 2022.

  3. The Wall Street Journal. "India’s Biggest Cities See Covid-19 Cases Fall Sharply, Raising Hopes for Omicron Peak." Accessed Feb. 7, 2022.

  4. YCharts. “Financial Data.” Accessed Feb. 5, 2022.

  5. ETF Database. “ETF Screener.” Accessed Nov. 17, 2021.

  6. ETF Database. "MSCI India Small Cap Index – ETF Tracker." Accessed Feb. 6, 2022.

  7. iShares by BlackRock. “SMIN: iShares MSCI India Small-Cap ETF.” Accessed Feb. 6, 2022.

  8. ETF Database. "iShares MSCI India Small-Cap ETF (SMIN)." Accessed Feb. 6, 2022.

  9. WisdomTree. “WTIND: WisdomTree India Earnings Index.” Accessed Feb. 6, 2022.

  10. WisdomTree. “EPI: WisdomTree India Earnings Fund.” Accessed Feb. 6, 2022.

  11. ETF Database. “EPI: WisdomTree India Earnings Fund.” Accessed Feb. 6, 2022.

  12. VanEck. “GLIN: VanEck India Growth Leaders ETF.” Accessed Feb. 7, 2022.

  13. ETF Database. “GLIN: VanEck India Growth Leaders ETF.” Accessed Feb. 6, 2022.

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