NEW YORK (TheStreet) -- With over 1,000 products currently available, the ETF universe caters to investors looking for exposure to seemingly any corner of the global marketplace. One region that has remained relatively untouched has been Africa.This is not to say that fund sponsors have not tried to venture into this corner of the globe. On the contrary, Van Eck currently offers funds like the Market Vectors Egypt ETF ( EGPT) and the wide-reaching Market Vectors Africa Index ETF ( AFK), which targets nations including South Africa, Nigeria, Egypt, and Morocco. Interestingly, despite its branding as an Africa-focused product, AFK's Web site notes that a full quarter of its assets are actually dedicated to companies based outside of the continent including the U.K., Canada, the U.S. and Australia.
EZA has enjoyed some improvement in our long-term momentum rankings and, with a strong GDP reading, the nation's markets may be in store for some strength. South Africa, however, is not immune to the challenges facing the rest of the globe. It is not unusual to see the negative impact of macroeconomic challenges magnified in inherently volatile emerging markets. Therefore, a flare-up from Greece or another troubled member of the EU could send the fund into a tailspin. Meanwhile, staggeringly high unemployment continues to pose a serious threat to the nation's marketplace. Ultimately, EZA is best approached as a small, tactical position for aggressive investors. Given the challenges facing the nation, this is not a fund to fall in love with. Rather, traders should be ready to unload in the event that weaknesses crop up. Written by Don Dion in Williamstown, Mass.