ETF Trends
ETF Trends

Egypt is a well-diversified economy with a strong financial system, and the country has experienced robust growth over the last decade. Van Eck recently launched a country-specific exchange traded fund (ETF) to track Egypt that may be worth a gander.

The recently-launched Market Vectors Egypt Index (NYSEArca: EGPT) might have a high valuation right now, but down the line it could deliver an opportunity, remarks Carl T. Delfeld for Seeking Alpha. [Market Vectors Launches New Egypt ETF.]

Why?

  • Egypt is the most populous country in the Arab world and 16th largest in the world, with around 80 million people. The country’s per capita GDP is below the global average.
  • EGPT includes a heavy weighting toward the financial sector, which makes up around 40% of the portfolio. The financial system in Egypt is one of the most developed in the emerging markets, with a loan-to-deposit ratio at just 50% while less stable economies have ratios as high as 120%. Sectors that have a greater than 10% weighting in the fund include financials, telecommunication services, industrials and materials.
  • Unlike other countries in the region, oil and gas only accounts for around 15% of the country’s GDP. Egypt has other major sectors that account for a larger portion of GDP, such as tourism, agriculture and industrials.
  • Egypt’s real economic growth has averaged 4.9% annually since the year 2000 and 6.3% for the last three years ending Dec. 31.

EGPT is still very new; once it’s been around long enough to establish a long-term trend line, it may be worth a look for any investor keen for focused emerging market exposure in a growing country. Have your strategy in place; we mind the 200-day moving average. [Read More About Trend Following Here.]

For more information on Egypt, visit our Egypt category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.