Amid another spate of geopolitical tensions in the Middle East, investors are flocking back to stocks in one of the regions most volatile countries: Egypt.
Since June 11, investors outside the Arab world have purchased $406 million of Egyptian equities, almost eight times the amount they purchased in 2014 before the announcement, reports Ahmed A. Namatalla for Bloomberg.
The Market Vectors Egypt Index ETF (NYSEArca: EGPT) is up nearly 42% this year, making the lone Egypt-specific ETF the third-best non-leveraged ETF of any type and the second-best single-country fund behind only the Market Vectors India Small-Cap Index ETF (NYSEArca: SCIF).
Perhaps not coincidentally and as Bloomberg reports, June 11 was the day after Egypt dodged a demotion by index provider MSCI (NYSE: MSCI) to frontier market from emerging markets status. Since then, EGPT is up nearly 9%. [Egypt ETF Dodges Frontier Demotion]
Earlier this year, another index provider, Russell Investments, demoted Egypt to frontier status, moving the North African nation to frontier markets classification in June. Investors have recently been warming to EGPT.
“The fund has picked up another $15 million in new assets in the past couple sessions, making year to date inflows about $25 million,” said StreetOne Financial Vice President Paul Weisbruch in a note out last Friday.