MNH in the Right Emerging Market Look here
Stocks took a hit earlier in the week, and many emerging markets felt the pinch more than most. However, one of those developing markets in particular is faring surprisingly well right now.
If you’ve never considered an investment in Egypt, today I’d like to talk with you more about why this land that’s home to two of the world’s seven wonders is gearing up to become an investing wonder in its own right.
Egypt is what you’d call a frontier market, which I like to think of as a “pre-emerging” economy ... even though it is home to what many consider to be the first great civilization in the world. However, along with pharaohs and pyramids, it might also be able to add “profits” to that list, and soon.
The Easiest Way to Invest in Egypt
In the first quarter of this year, Market Vectors Egypt Index ETF (EGPT) was ranked as one of the leading non-leveraged ETFs, as it rose nearly 30% during that time. And even as many other emerging- and frontier-market indices took a tumble recently, the Egypt ETF only lost about 2% when some other markets lost up to 30%.
In a rocky trading environment like the one we’re seeing right now, it’s unusual to see emerging- or frontier-market ETFs with such resilience. And that’s why I believe it’s time to start paying close attention to EGPT.
The fund consists of publicly traded companies that are domiciled and primarily listed on an exchange in Egypt or that generate at least 50% of their revenues in Egypt. The stocks are mainly small- and micro-cap, and 20% are in communications services, with Orascom (OLTD on the London Exchange) being the largest telecom position.
While the ETF has been around for more than two years, it has less than $50 million in assets. Although it has not caught on across a broader investment base, I believe that could change in the very near future.
