Egypt Is Now Available To ETF Investors (EGPT)

Market Vectors Egypt Index ETF (EGPT), the first single-country fund that is offering US investors exposure to Egypt, was launched yesterday (February 18, 2010).  The underlying index includes publicly traded companies domiciled and primarily listed on an Egyptian exchange or that generate at least 50% of their revenues in Egypt.

Van Eck Global, the company behind the Market Vectors brand, was recently named the “Most Innovative ETF Provider of 2009” and continues to do more of the same in 2010.  EGPT is the first product to provide US investors with convenient access to the third-largest economy in Africa.  Egypt’s real economic growth averaged 4.9% annually since 2000 and 6.3% for the three years ending 12/31/09.

The index overview shows the sector breakdown as Financials 42.4%, Telecommunications 17.3%, Industrials 15.9%, Materials 14.2%, Energy 4.2%, Consumer Discretionary 3.6%, and Consumer Staples 2.4%.  The market capitalization breakdown is Large Cap (> $6.0B) 19.8%, Medium Cap ($1.5 – $6.0B) 52.9%, and Small Cap (<$1.5B) 27.3%.

The fund overview lists the ten largest holdings as Commercial International Bank 8.6%, Orascom Construction Industries 7.9%, Orascom Telecom Holding SAE 7.6%, Egyptian Financial Group-Hermes Holding 6.3%, Egyptian Kuwaiti Holding Co 5.9%, Talaat Moustafa Group 5.5%, Egyptian Co for Mobile Services 5.3%, Elswedy Cables Holding Co 5.29%, Al Ezz Steel Rebars SAE 5.0%, and Telecom Egypt 4.8%.

EGPT’s underlying index consists of 28 companies and has 5.47% dividend yield.  Even after subtracting the expense ratio, which is capped at 0.94%, the new ETF might be able to generate a dividend yield in excess of 4%.

- Ron Rowland, Invest With An Edge