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WisdomTree launches Indian smart beta ETF

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ETF provider WisdomTree has launched accumulating and distributing share classes of the WisdomTree India Quality UCITS ETF (EPIQ) on the London Stock Exchange, offering smart beta exposure to Indian stocks with a focus on quality as measured by above average returns on assets (ROA) and return on equity (ROE).

WisdomTree writes that the Indian equity market offers an exciting opportunity for investors; it represents the world’s seventh largest economy and the fourth largest equity market within emerging markets.

In addition, having recently grown at a rate of 7.5 per cent per annum, the IMF estimates that India will be the world’s fastest growing large economy over the next five years and they expect growth to average 8.1 per cent. WisdomTree believes these positive fundamentals are underpinned by favourable demographics, a boost to fiscal spending, a lowering of tax rates and a stable political climate committed to reform.

The new UCITS ETF tracks the WisdomTree India Quality Index, focused on the top 33 per cent of companies using a combined ranking of the three-year average return on assets and return on equity. The index constituents are then weighted by market capitalisation. These factors have provided consistent exposure to quality stocks, offering the potential to deliver above average risk adjusted returns.

“We’re excited to be launching EPIQ, an innovative ETF that provides a quality tilt on the Indian equity market,” says Nizam Hamid (pictured), ETF Strategist. “Our Fund has the advantage of diversification, with over 100 constituents, and a broad sector exposure tilted towards the core drivers of growth in the Indian economy.”

“With a favourable global macro environment, decisive policy making and exciting growth trends, India has a compelling strategic as well as tactical allocation investment case,” Hamid adds.

Morgan Lee, Head of European Distribution, says, “Investors have expressed enthusiastic interest in gaining exposure to the Indian equity market via a physically replicating UCITS ETF as, up until now, investor choices have been limited. The addition of our quality titled methodology provides a differentiated solution for those looking to allocate towards this exciting market.” 
 
The Fund lists on the London Stock Exchange following on from its listing on the Borsa Italiana and the Deutsche Börse last week.

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