Wednesday, May 4, 2011

Top ETFs for the Frontier Markets of Turkey, Thailand and South Africa

 Review of TUR, THD and EZA as 
 the Best Exchange Traded Funds 
 for Frontier Markets 
 During and After the Financial Crisis 

The top vehicles for growth include the exchange traded funds (ETFs) for the frontier markets of Thailand, Turkey and South Africa. The time frame for evaluation covers a crucial stretch of three years spanning the financial crisis of 2008 and its aftermath. In sizing up the performance of the funds, the key factors include the return on investment, the volatility of the pool, and the cost of maintenance.

As a rule, the vital features are interlinked rather than independent. As an example, a vehicle on the fast track to growth is prone to be more flighty than a sluggish one which plods along at a modest pace. Another sample lies in the cost structure: an index fund with a heavy burden of maintenance fees is prone to lag behind its rivals that have leaner structures.

In sizing up the index funds, a straightforward scheme is to begin with a list of the high flyers. Then the other factors such as risk and cost can be brought to bear on the appraisal.

For the tally at hand, the total return – consisting of the capital gain and dividend yield – covered a stretch of three years ending in March 2011. By this reckoning, the index fund for Turkey earned the gold medal.

Meanwhile, the pool for South Africa turned in a solid return coupled with a lower level of volatility. As a result, the African fund won the trophy for risk-adjusted returns.

In sizing up the efficiency of operations, the funds for Turkey and South Africa boasted a slim advantage over the pool for Thailand. On the other hand, the difference in maintenance fees was too small to have much of an impact on the rankings.

Read more on Top ETFs for the Frontier Markets of Turkey, Thailand and South Africa.

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