The Africa-Centric ETFdb Portfolio is now available to ETFdb Pro members, offering an option for those who wish to construct a portfolio that offers well-rounded exposure across African markets, believing this economic region offers lucrative growth potential going forward. This portfolio may appeal to risk-tolerant investors who wish to position themselves favorably across several African nations that stand to benefit as the global economic recovery picks up and demand for raw materials increases.
The Africa-Centric ETFdb Portfolio is constructed with a regional theme and is designed to offer well-rounded exposure across the biggest African economies. Investors often times overlook opportunities in Africa given the geopolitical instability that is associated with the continent. We however feel that this economic region offers a risk/return profile that may appeal to those who wish to round out emerging markets exposure beyond BRIC and Asia [see Time For An Africa ETF?]. Since 2000, this continent has seen higher GDP growth rates than most developed markets, highlighting the lucrative growth potential on the horizon. Africa is also incredibly rich in natural resources and has high concentrations of copper, oil, timber, and platinum amongst many other raw materials [see ETFs For The "Next 11" Economies].
The Africa-Centric ETFdb Portfolio offers well diversified exposure across African companies of all sizes. This allows for investors to gain “pure play” exposure to the local economy through smaller firms, while also maintaining some degree of safety with exposure to larger, multinational corporations [see A Look At South Africa ETF Options]. This portfolio is heavily tilted towards equities and may be too risky for retired investors or those nearing retirement. Another distinguishing feature about the Africa-Centric ETFdb Portfolio is that it lacks traditional fixed income exposure, instead we have opted for a one of a kind currency ETF that bears bond-like characteristics. Investors should keep in mind that African economies still face serious headwinds going forward despite all of the bullish prospects. Some of the obstacles include high levels of corruption in society, poor health care and education systems, as well as a lack of infrastructure. This portfolios is not intended as a long-term investment strategy, instead it is meant as a complement to existing portfolios for investors who believe that African markets are well positioned to grow in the coming years [see Closer Look At Frontier Market ETFs].
The complete Africa-Centric ETFdb Portfolio is available to ETFdb Pro members or with a free 7-day trial to ETFdb Pro. Also check out our new Euro Free Europe ETFdb Portfolio, as well as our Commodity Guru ETFdb Portfolio.
Also included with the ETFdb Pro subscription are more than 25 all-ETF model portfolios, including both retirement-focused and more tactical themed strategies. [To see all that is included, a free sample of the Emerging & Frontier Markets ETFdb Portfolio is available to all ETFdb readers]
Disclosure: No positions at time of writing.