A Surprising Region Leads Foreign ETFs in 2014

Here is a factoid that illustrates just how bad things are for foreign exchange traded funds this year: With a year-to-date gain of 1.7% heading into Thursday’s session, the iShares MSCI New Zealand Capped ETF (NYSEArca: ENZL) was on the list of the 10 best foreign, non-leveraged ETFs.

That is not a knock on New Zealand or ENZL. The factoid does illustrate the decrepit state of affairs for a swath of emerging markets ETFs and the bitter disappointment investors have been subjected to with U.S. and Japan ETFs this year. [Investors Pull Billions from Emerging Markets ETFs]

Not all foreign ETFs have been duds this year. Problem is some of the real winners give investors reasons to pass these funds by, including fund size or lack thereof, and the region said ETFs offer exposure to. That region is the Middle East.

Despite the well -documented tale of woe for the iShares MSCI Turkey ETF (NYSEArca: TUR), once viewed as the best ETF for accessing equities anywhere in the Arab world, some Middle East ETFs have surged this year. [Rate Hikes Not Helping BIITS ETFs]

Alright, so it can be argued that Turkey is not a Middle East nation, but that does not change the fact that four of the top five foreign ETFs this year focus squarely on the Middle East. The best of the lot is the Market Vectors Egypt Index ETF (NYSEArca: EGPT), which is not only the best foreign ETF with a year-to-date gain of almost 11%, but also one of the 10 best non-leveraged ETFs of any stripe.

Egyptian stocks hit a three-year high Thursday following “a statement from the military authorising army chief Abdel-Fattah El-Sisi to run for president,” according to Ahram Online.