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Van Eck launches US-based ETF focusing on Egypt

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New York-based asset manager Van Eck Global has launched the Market Vectors Egypt Index ETF on NYSE Arca the first US-based exchange-traded fund to provide focused exposure to Egypt’s economy.

Egypt’s real economic growth has averaged 4.9 per cent annually since the start of the last decade and 6.3 per cent for the three years ending 31 December 2009.

Egypt’s move to a more open, market-oriented economy has, in turn, led to expanding foreign investment, net exports, industrial development, and business formation.

The most populous Arab country and the third most populous country in Africa, Egypt is home to an increasingly diversified economy.

"The Market Vectors Egypt Index ETF addresses a growing interest in using individual country funds to calibrate international equity allocations, particularly on the part of investors dissatisfied with existing indices," says Jan van Eck, principal at Van Eck Global. "These funds serve as targeted tools for overweighting or underweighting specific geographies and economies. As with our other recent ETF introductions, EGPT is designed to provide convenient access to a compelling market that is otherwise not available to the average US investor."

The fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Egypt Index.

The index provides a means to track the overall performance of companies that are domiciled and primarily listed in Egypt, or that generate a majority of their revenues in the country.

As of 31 January 2010, the Egypt index included 28 securities; the top three index holdings were Commercial International Bank, Orascom Construction Industries and Orascom Telecom.

Sectors with a greater than ten per cent weighting as of 31 January included financials, telecommunication services, industrials and materials.

The index is calculated using a market-capitalisation weighting methodology, and is float-adjusted and modified so that the weight of any single component does not account for more than 8.0 per cent of the total capitalisation at a rebalancing date. It is denominated in US dollars and reviewed quarterly.

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