There’s always a trend somewhere. Eastern Europe exchange traded funds (ETFs) are one area in particular that are enjoying a resurgence.
Russia is often the first country to spring to mind when you think about the region. Frank Talk on US Global Investors reports that countries such as Poland, the Czech Republic and Turkey are the ones that have really outperformed.
A couple cases in point: year-to-date, iShares MSCI Turkey (NYSEArca: TUR) is up 42.9% and Market Vectors Poland (NYSEArca: EPOL) is up 12.7%. Russia hasn’t been slacking, either: Market Vectors Russia (NYSEArca: RSX) is up 7.8% this year. [Recession Dogs Developed, Emerging Europe ETFs.]
Domestic consumption and fixed investment are expected to contribute half to the region’s GDP this year and nearly all of it next year.
Eastern Europe is not without risks, though.
The Economic Times reports that those countries are somewhat dependent on their Western neighbors, though less so than in years past. If the developed European nations can’t get a grip on finances, their neighbors may suffer. [Russia ETFs May Benefit from Modernization.]
That said, however, this is one of the first times in history that the Eastern to Central European countries may outdo their Western European counterparts economically.
In addition to single-country Eastern Europe ETFs, there are some broad offerings, too:
- SPDR S&P Emerging Europe (NYSEArca: GUR): The top countries are Russia (64.5%), Turkey (15.9%), Poland (10.5%) and Hungary (4.7%); it’s up 10.1% year-to-date
- iShares Emerging Markets Eastern Europe (NYSEArca: ESR): The top countries are Russia (73.6%), Poland (14.9%) and Hungary (6.8%); it’s up 6.8% year-to-date
Tisha Guerrero 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.