Core Insights - The WisdomTree India Earnings Fund (EPI) provides investors with exposure to India's rapidly growing economy while avoiding overvaluation of growth stocks that may not yield earnings [1][2] - EPI has $2.8 billion in assets and has achieved a 167% return over the past decade, but it underperformed with a 3% gain in the last year compared to the S&P 500's 17% increase [2][3] Fund Performance - EPI's performance in 2026 is heavily influenced by foreign portfolio investment flows, which have seen a record outflow of $18 billion from Indian equities in 2025, continuing with an additional $846 million in early 2026 [2][5] - The fund's top holdings include Reliance Industries (7.7%), HDFC Bank (6%), and ICICI Bank (5%), which are directly affected by foreign investment trends [5] Market Conditions - Foreign investors exited the Indian market due to high valuations, a weakening rupee (which fell 5% against the dollar), and concerns over potential U.S. tariffs on Indian exports [6] - The rupee's continued depreciation, trading around 90 per dollar, poses additional challenges for U.S. investors in EPI as it creates a double headwind when converting rupees back to dollars [6] Future Outlook - Monitoring monthly foreign portfolio investment data from India's National Securities Depository Limited is crucial; a return of net foreign buying, especially in the March quarter, could indicate renewed confidence in the market [7] - Potential catalysts for a reversal in foreign investment flows include progress on a U.S.-India trade deal, stabilization of the rupee, and evidence of strong corporate earnings growth linked to India's GDP growth, which is expected to exceed 7% for fiscal 2026 [7]