May 28, 2007 at 1:17 pm by Tom Lydon
Eastern European stocks are forecasted to outperform those of Western Europe, and exchange traded funds (ETFs) that focus on these countries could benefit. The performance gap between developed Europe and it’s Eastern counterparts could widen during the next year. Poland is seeing more robust economic activity with an expected GDP rate of 6% (up from 5.8% in 2006), while Russia’s economy is growing at a rate of 7% a year. Opportunity in this region is coming through energy, banking and mobile-phone sectors. Murray Coleman for The Wall Street Journal reports higher employment is boosting disposable income and consumer spending. There is also a construction boom with government financed infrastructure. A revitalized housing market is showing mortgage activity and consumer lending.
While there is not a specific Eastern European ETF, there are ways to tap into this market. Austria has become the hub for Eastern European commerce. iShares MSCI Austria Index(EWO) up 11% year to date. Market Vectors Russia (RSX) was just recently launched, but gives investors another opportunity to invest in the region.
Tags: Austria, Eastern Europe, EWO, Russia
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