Investing in India – ETFs: WisdomTree India Earnings Fund (EPI), PowerShares India Portfolio (PIN)

INDY and INDA are relatively new, so it is difficult to do a comparison with charts. However, we can substitute the iPath MSCI India Index ETN for INDA, because they track the same Index. For the purposes of this article, the differences between ETFs and ETNs can be ignored, except for one: The ETN tracks the total returns of the index and doesn’t pay a dividend, so it is relatively tax-advantaged.

Now we can do some comparison.

I’m not exaclty sure why Morningstar has decided to give INDY a three-star rating, while the rest get a one-star rating because if you look at the “Funds in Category” total, Morningstar says 4. So among the four very similar ETFs that it ranks, Morningstar has decided that one is three-star, and the rest are one-star. In this case, however, the choice is simple: Just ignore Morningstar.

Here is what to do. If you don’t care about paying taxes on dividends or getting them paid as cash, pick the lowest expense ratio fund. Otherwise, pick INP.

The article Investing in India – ETFs originally appeared on Fool.com and is written by Siddharth Dalal.

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