6 facts tell me to bet on Eastern Europe stocks (or ETFs…) April 16, 2007Posted by deminvest in etf, European Stocks, funds, growth stock, investment, investment strategies, LYCE.FRA Eastern Europe-LX ETF, stocks.
Let’s look at a few facts:
1) Western European Economy is finally taking off.
2) Germany is the locomotive of European growth.
3) Euro currency is at very high level.
4) European Community is enlarging itself eastward.
5) Russia is the largest and richest of commodities country in the World.
6) Eastern Europe still has a very cheap workforce.
Looking at those facts and at this map , I have decided to invest in Eastern Europe: Germany has borders with the Czech Republic and Poland and is only a few hours of truck away from other Eastern European countries.
I have little doubt taht in a short timespan Eastern Europe will reach Western European wealth standards, just like Italy, Ireland and Spain have, in few years, reached similar wealth levels of Germany England and France. There was a time when Irish or Italian citizens had to emigrate. Now both countries attract immigrants.
Unfortunately Eastern European stocks are not as “fashionable” as Indian and Chinese stocks. So they are not traded on Wall Street and it is not easy to buy them directly. So I have to give up my general rule not to pay useless commissions and I have to chose a good ETF to buy Eastern Europe stock:
I chose Eastern Europe-LX (LYCE.FRA) traded on the Xetra market. This ETF has 0.5% yearly commissions (vampires!), it mainly has stocks from Hungary, Czech Republic and Poland.
Dividend yield: 2.592
If you understand strange languages, you’ll maybe like to know that LYCE’s first 10 holdings are:
Telekomunikacja Polska 12.5
Cesky Telecom 5.7
Polski Koncern Naftowy ORLEN 10.2
Powszechna Kasa Oszczednosci Bk Polski 5.5
Bank Pekao 7.5
Bank Przemyslowo-Handlowy PBK 5.2
OTP Bank 5.1
Erste Bank 7.2
Mol Magyar Olaj- Es Gazipari Rt. 4.9
I am not at all sure that I chose the best Eastern Europe ETF, what I liked about it is the fact that it does mainly invest in countries I trust and like very much.