Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect India-based companies to thrive, thanks to the nation's technological talent and booming population, the WisdomTree India Earnings
ETFs often sport lower expense ratios than their mutual fund cousins. The India ETF's expense ratio -- its annual fee -- is a not-so-low 0.88%. However, that still beats many India-focused mutual funds, which charge as much as 2%.
This ETF has performed well, but it's also very young, with just three years on the books. It fell sharply after its 2008 inception, nearly doubled in 2009, gained 20% in 2010, and is up 11% over the past year. As with most investments, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver. With a relatively low turnover rate of 33%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
In another appealing feature, this India ETF weights its components by earnings, rather than market capitalization, favoring the companies raking in money over those that aren't.
What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Tata Motors
Business and IT consulting and outsourcing giants Infosys
The big picture
Opinions on India's prospects for investors are mixed. If you're bullish on it, and there's ample reason to be, a well-chosen ETF can grant you instant diversification across the country -- and make investing in and profiting from it that much easier.