Sector allocations: Financials, 44%; Energy, 24.2%; Industrials, 15.7%; Materials, 7.4%; Consumer Discretionary, 2.5%; Utilities, 2.3%; Consumer Staples, 1.6%.
Indonesia. The newly Democratic nation is becoming a fast-growing Asian economy. The average standard of living is still low, but that only means that the potential is that much greater. For instance, if Indonesia’s economy were on par with Mexico’s, it would be three times its current size. Indonesia is also rich in oil, gas, coal, tin, copper, silver and gold. Conveniently situated next to India and China, Indonesia is becoming a marginal supplier of natural resources to its increasingly insatiable neighbors. [Indonesia among the year’s best.]
- Market Vectors Indonesia ETF (NYSEArca: IDX)
Sector allocations: Financials, 25.2%; Materials, 23.1%; Energy, 14.6%; Consumer Staples, 12.5%; Consumer Discretionary, 10.9%.
Nigeria. Nigeria is the most populous country in Africa, with 155 million people, and it is expected to maintain a high birth rate through 2050. The country is growing and starting to liberalize its economy, having only just come into a Democracy. Some have argued, however, that Nigeria is heavily dependent on its rich oil reserves. Corruption is still rampant and there are some ethnic and religious conflicts. [Recovery in Africa ETFs.]
- There is no Nigeria country-specific ETF, but an investor may gain exposure to the region through Market Vectors Africa ETF (NYSEArca: AFK) – Nigeria is around 22%.
Sector allocations: Banking, 27.9%; Basic Resources, 19.7%; Telecommunications, 12.2%; Oil & Gas, 11.5%.
South Africa. South Africa is the strongest African economy, with modern institutes and commodity wealth such as gold, platinum, coal and diamonds. The economy is diversified with mining, agriculture, services, and manufacturing. Furthermore, South Africa is benefiting from its commodities advantage. Still, half the country lives below the poverty line. [South Africa, a return to normalcy?]
- iShares MSCI South Africa Index Fund (NYSEArca: EZA)
Sector allocations: Materials, 27.8%; Financials, 26%; Telecommunication Services, 12.9%; Consumer Discretionary, 11.4%; Energy, 10.5%.
Max Chen contributed to this article.