January 20, 2008 at 1:00 pm by Tom Lydon
Which exchange traded fund (ETF) receives little news coverage has an elusive, mis-titled name? The SPDR Emerging Middle East and Africa ETF (GAF).
The fund has been in the shadow of most emerging markets funds over the past few years. GAF does not entirely cover territories implied in its name, reports Tomas Birriel for Seeking Alpha; rather, it is a heavily-weighted in South Africa (65%), Israel (17%) and Egypt (6%).
Briel also notes that there appears to be an inverse relationship between GAF and the 10-year note yield. As the 10-year note yield drops, the price of GAF rises, as seen in October, when the rate cuts began. The Fed is likely to cut rates to 3.75%-4%, possibly causing another spike for GAF. It should be noted, however, that the fund is currently below its trend line. Keep an eye on it.
Tags: Egypt, Emerging Markets, Israel, South Africa
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