Biggest Losers in Emerging-Market ETFs This Year Focus on IndiaBy
Eight of this year’s 10 worst-performing U.S. emerging-market non-leveraged ETFs are focused on India. The biggest exchange-traded fund, BlackRock’s $5.2 billion iShares MSCI India ETF, lost more than 5 percent -- the least impressive start since its inception in 2012.
Pick a reason: A newly reintroduced tax on long-term capital gains turned off middle-class Indians who had been scooping up equities. There’s been fear that a $2 billion bank fraud could turn into a contagion. That’s not to mention lower earnings growth compared with other developing markets. Sure, India has pockets of value, some fund managers say.
But with political turmoil expected ahead of elections early next year, there’s little chance for a turnaround this year, according to Srivathsan Ramachandran, director of institutional equities sales at Spark Capital Advisors in Chennai.
India’s benchmark S&P BSE Sensex entered its first correction in 15 months last week, as concern over trade skirmishes triggered a selloff across Asia.