Biggest Losers in Emerging-Market ETFs This Year Focus on India

(Bloomberg) -- 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 , 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.

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