This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ETFs to Bet on South Africa's Rise

NEW YORK ( TheStreet) -- News over the weekend could make South Africa a more attractive investment destination. As Bloomberg reports, South Africa has been offered a seat at the table for the next meeting of the BRIC group of major emerging markets, Brazil, Russia, India and China.

South Africa is a much smaller country with a population of only 49 million, gross domestic product in 2009 of $277 billion, per capita income of $2,751 and an unemployment rate well north of 20%. South Africa certainly has the feel of still being an emerging market but the story on the ground is improving albeit with a long way to go. The country is viewed by the BRIC nations as a sort of gateway to Sub-Saharan Africa.

The simplest way in would be the iShares MSCI South Africa Index Fund (EZA), a broad-based, large-cap focused exchange-traded fund. At the sector level, the fund is heaviest in materials at 27%, followed by 24% in financials, consumer discretionary at 13% and telecom at 12% before getting much smaller. Some of the larger stocks in the fund are MTN Group , a telecom provider, Sasol (SSL), which creates synthetic oil by liquefying coal among other energy-related businesses, and Naspers, a media company. For a little context, the iShares MSCI South Africa Index Fund dropped slightly more than the S&P 500 from peak to trough in the financial crisis but has recovered to that peak while the S&P 500 is still down roughly 20% from its 2007 peak.

An alternative way in with ETFs is to build exposure via the South Africa weightings in funds that are narrower than EZA. For example, the First Trust ISE Global Platinum Index Fund (PLTM), which owns shares in companies that mine platinum group metals, has a 32% weighting in South Africa with several of the largest holdings being from South Africa. The platinum fund combined with the EGshares Emerging Market Consumer Fund (ECON), which is 14% invested in South Africa, could offer a more focused way into the country.

Of course, there are plenty of individual stocks to consider as well. There are gold miners like AngloGold Ashanti (AU) or Gold Fields (GFI), and platinum miners like Impala Platinum Holdings , all plays on where the country will derive its prosperity.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ECON $22.80 0.00%
EZA $55.70 0.00%
PLTM $4.27 2.64%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs