As Pakistan’s reforms begin to produce favorable results, investors can tap into the growing frontier market through a recently launched country-specific exchange traded fund.
In April, the Global X MSCI Pakistan ETF (NYSEArca: PAK) began trading. PAK has increased 4.1% and has gathered $5.51 million in assets under management.
Bolstering Pakistan’s investment case, the International Monetary Fund stated that the country’s efforts to diminish its budget deficit, build its foreign reserve and other economic reforms “has significantly reduced near-term risks,” reports Art Mooradian for the Wall Street Journal.
Pakistan only narrowly missed some budget deficit, tax revenue and government borrowing targets. Additionally, the country’s foreign exchange reserves at the state bank hit $13.5 billion at the end of June, rising at a healthy clip.
The organization also pointed to Pakistan’s progress in implementing social programs, restructuring loss-making public enterprises, advancing energy-sector reforms and improving its business climate.
The changes “will help strengthen competitiveness and resilience of the economy and transform Pakistan into a dynamic emerging-market economy,” the IMF said.
Moreover, reforms could help bolster the country’s financial and energy sectors, two major components of PAK’s underlying holdings at 36.7% and 22.4%, respectively.