How to Play Africa: One ETF Banks on GDP

The residential district of Woodstock overlooks cranes on the harbourside in the commercial port area of Cape Town, South Africa. Photograph by0xA0Nadine Hutton/Bloomberg

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By Eric Balchunas

July 22, 2013 at 8:42 PM UTC

This article is for subscribers only.

Africa is full of both potential and turmoil. One day the International Monetary Fund forecasts that African economies will grow 5.7 percent on average this year; the next day there is a military coup in Egypt.

The Market Vectors Africa Index ETF (AFK) mirrors this volatility. The exchange-traded fund, which has a 3.7 percent yield, is up 6.7 percent in the past year, and down 8.3 percent year to date through mid-June. Since then, in less than a month, it has surged 10 percent.