Talkin' Turkey

The iShares MSCI Turkey Investible Market Index (TUR - commentary - Trade Now) seeks investment results that correspond to the aggregate Turkish equity market. This country has long sought admittance to the European Union. This quest has been all but halted in recent years, but as economic hard times have fallen on both the country and the EU, this desire for admittance is alive and well.

The current economic crisis has affected every corner of the earth. In Europe, some nations have been hit harder than others; Turkey, in particular, has suffered more. As The Wall Street Journal reports, the nation's GDP was down more than 17% in the first quarter compared to the same time last year. Furthermore, Turkey's GDP may suffer a contraction by as much as 7% this year. However, amid all this negative news, the country is still looking to reopen the process of accession to the EU.

Of the 35 negotiations included in the admittance process, Turkey has formally opened 11. Eight chapters have been halted due to the dispute with Cyprus and five have been halted by France. Turkey is currently beginning negotiations concerning chapter 16, which is centered on the issue of taxation. At this rate, the expected date of accession is pushed back to 2015.

While Turkey still has much work ahead before it can join the European Union, entry is not out of its reach. While the country has certainly seen its share of bad news, admission in the EU would provide some much-needed stability for the country's economy. The EU would also stand to gain -- Turkey would become not only the union's largest admittance but also its first mainly Muslim country.

Investors would benefit most by going long TUR as the country attempts to rebuild some of what it has lost in the current economic crisis. The fund has doubled from its low in early March and remains highly ranked in our ETF universe in terms of relative momentum.

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At the time of publication, Dion had no positions in the stocks mentioned.

Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.