For Clues to Greek ETF’s Future See Egypt After Arab Spring
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How good are exchange-traded funds like the Global X FTSE Greece 20 at tracking stock prices when no prices exist? Egypt in 2011 offers some insights.
When Cairo’s exchange was closed for almost two months during the Arab Spring uprising, speculators used a U.S.-listed security as a way of estimating where Egyptian equities would open once trading resumed. Turned out they were a little off: while the ETF slipped about 1 percent during the suspension, it plunged 8.1 percent after the exchange reopened.