Investors were rocked last week with more dire news emerging from Europe. This time, it’s Hungary’s economic crisis that threatens to put the country into bankruptcy. A Hungary specific exchange traded fund (ETF) does not exist, but there are funds with exposure that you may want to be on the lookout for.
According to CNN Money, Hungary’s forint plunged to a one-year low against the euro Friday, as investors digested news that Hungary’s economic crisis is worse than was reported. Likewise, the cost of insuring Hungarian debt surged 23% to $380,000 on $10 million worth of bonds for five years.
By Monday, Hungary backed off its statements in order to calm investors. A government official says the country is doing and will do everything it can to follow “the planned deficit path,” reports Dan Bilefsky for The New York Times.
Back in 2008, Hungary took $25 billion in aid from the IMF and European Union, as it tried to reverse years of deficit spending. But Peter Szijjarto, a spokesman for new Prime Minister Viktor Orban, doesn’t think the bailout was enough. He expects Hungary’s plans to bring its budget deficit under 4% of GDP will fail. [Bailout Package.]
Despite the forecast, the new government expects to move forward with plans to cut tax rates in an attempt to boost the economy. Naturally, investors are worried that the new government lacks the experience and knowledge to deal with the crisis adequately.
The ETF Professor for Benzinga gives investors looking to trade on Hungary’s woes – or avoid them entirely – the following ETFs:
- SPDR S&P Emerging Europe ETF (NYSEArca: GUR)
- Emerging Global Shares Emerging Markets Energy Titans ETF (NYSEArca: EEO): 4.4% Hungary
- Emerging Markets Financials Titans ETF (NYSEArca: EFN): 3% Hungary
- iShares MSCI Emerging Markets Eastern Europe ETF (NYSEArca: ESR): 6.8% Hungary
- ProShares UltraShort MSCI Emerging Markets ETF (NYSEArca: EEV)
- ProShares Short MSCI Emerging Markets ETF (NYSEArca: EUM)
For more stories on Hungary, visit our Hungary category.
Sumin Kim contributed to this article.
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.