India ETFs: Did Recent Rally Show A Glimpse Of Future Winners?

by: Christian Magoon

Last week was big for India markets as the Reserve Bank of India announced a 25bps rate increase but also indicated that future rate increases weren't likely. That positive news pushed stocks upward. To add to the momentum, the most recent EU debt crisis deal was announced late in the week sending many investors around the world into a "risk on" mode - at least temporarily. This increased risk appetite benefited emerging markets like India.

Today, as the EU clouds are more ominous, I thought it would be great to quickly review the India ETF leaders over the last week in terms of performance. This head fake rally gave an interesting glimpse into what could be the most dynamic India ETFs to invest in once "risk on" returns for more than a few days.

India ETF Performance as Friday October 28th

From this chart courtesy of, you'll see that outside of the leveraged bull India ETFs, the more focused ETFs were the biggest winners over the last part of the week after the EU announcement.

While broad based ETFs INP and INDY had solid weekly performance numbers, they were outperformed by infrastructure focused INXX. INCO, consumers, and SCIF, small caps, led the pack right after the "risk on" surge late in the week.

It is also interesting to note that the biggest disparity in performance over the eventful week in India actually was between INXX and SCIF - infrastructure and small caps respectively.

Finally the two largest India ETFs, EPI and PIN, sat in the middle of the pack in terms of performance.

While this obviously was a short term sample, it will be interesting to see if some of these India ETF trends continue over the next rally. If so, there appears to be a bright future for more focused India ETFs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I am the publisher of the website