SMIN ETF

I am downgrading SMIN to a hold due to a higher P/E ratio and weakening technical trends despite strong long-term growth prospects. SMIN's portfolio is heavily weighted towards cyclical sectors, which could be vulnerable if emerging-market growth falters. The ETF's seasonality trends are weak from December to February, and technical indicators show bearish divergence and weakening momentum.

Investing in India's small-cap market offers strong growth potential, with the iShares MSCI India Small-Cap ETF providing diversified exposure to 499 companies. The SMIN ETF's sector composition, with heavy Industrials and Financials exposure, aligns well with India's long-term infrastructure and economic growth prospects. Despite a higher expense ratio of 0.79%, SMIN's past performance and diversification make it a compelling option for investors seeking underappreciated equity exposure.

The Investment Committee give you their top stocks to watch for the second half.

India looks set for policy continuity in PM Modi's third term. Relative to an exceptional macro/micro setup, valuations aren't all that demanding here. Having outperformed through the last two terms, SMIN's small/mid-caps should continue to do well.

Investors are encouraged to invest in India over China due to India's stronger growth and positive relationship with free market economies like the U.S. While China's stock market may appear inexpensive, concerns about demographics and political stability raise doubts about its investment potential. India's favorable demographics ensure future growth, and ongoing economic reforms and infrastructure developments led by the Modi government will further improve living standards.

iShares MSCI India Small-Cap ETF has generated tremendous alpha for a long time now. Indian small-caps are favored due to the country's strong economic growth, political stability, and encouraging industrial and business conditions. Despite a favorable backdrop, we close with some thoughts on why it may be prudent to not get carried away at these levels.

For investors seeking momentum, iShares MSCI India Small-Cap ETF SMIN is probably on the radar. The fund just hit a 52-week high and is up 53.8% from its 52-week low price of $48.11/share.

For investors seeking momentum, iShares MSCI India Small-Cap ETF ( SMIN ) is probably on the radar. The fund just hit a 52-week high and is up 49.6% from its 52-week low price of $48.11/share.

Indian large-cap equity performance has been impressive but nothing compared to the small and mid-caps. The widening small/mid-cap valuation premium is a concern, but investors also need to factor in the earnings growth differential. Heading into a catalyst-rich year ahead, the SMIN rally might still have legs.