For Immediate Release
Chicago, IL – November 25, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETF recently featured in the blog include iShares MSCI Turkey (AMEX:(TUR - Free Report) –Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
Has Turkey ETF Gone Sour this Thanksgiving?
Turkey is in great demand as the bird is the high point of a blessed Thanksgiving dinner. But in the investment world, there’s another Turkey that draws attention during the event. We’re talking about the country named Turkey. Let’s look at the investment odds surrounding this country right now and see why it’s not winning favor.
After Trump’s win and the greenback’s exorbitant surge, emerging markets like Turkey went into trouble tailspin. Troubles may turn more acute for Turkey given the country’s frequent political upheavals (read: ETF Asset Flow in Election Week).
So, for investors intending to know about this Turkey ahead of Thanksgiving, we would like to dish out the economic and stock market outlook of the country and its impact on the ETF world.
The pure-play Turkey ETF iShares MSCI Turkey (AMEX:(TUR - Free Report) – Free Report) lost about 6.9% in the last 10 trading days (as of November 21, 2016) and the product is off over 8.6% so far this year. So, it is not only the bird Turkey which is seeing a fall in prices this Thanksgiving, Turkey ETF too are facing the same fate (read: A Spread of Top-Ranked ETFs for Thanksgiving and After ).
What’s Behind the Bearishness?
Bleak Growth Prospect
The Turkish economy grew 0.3% sequentially in Q2, slackening from a downwardly revised 0.7% increment in the previous period and marking the poorest growth rate in seven quarters. Exports and household spending was a drag to the economy.
Speculation is rife that the country’s Q3 growth rate will likely be “the worst rate for the past 27 quarters” at around negative 0.5%. If this comes true, the Turkish economy would shrink for the first time since mid-2009.
IMF expects growth to slow down to 3% in 2017 from this year's 3.3%. The government’s 2017-19 medium-term economic program indicates 3.2% growth for 2016 and 4.4% for 2017, which seems a tall order now.
Investors should note that the country faced a military coup attempt on July 15 to oust Turkish President Recep Tayyip Erdogan, though it finally failed. Needless to say, such political threats are detrimental to the investment world (read: Political Instability Puts Turkey ETF in Focus ).
If this isn’t enough, there is growing disharmony between Turkey and Europe and the Turkish president is mulling over to “take its EU membership bid to a referendum (see all European Equity ETFs here).”
Lira at Historic Low
As far as inflation is concerned, consumer prices grew 7.16% year over year in October 2016, after a 7.28% increase in the previous month. With the greenback soaring on the Fed’s policy tightening outlook and rising inflationary expectations, Turkish lira plunged to a historic low on November 18 (read: ETF Winners & Losers as Dollar Hits 13-Year High ).
As U.S. Treasury bond yields started to rise post election, relatively high-yielding emerging market equity funds saw $6.2 billion of asset outflows, the highest since August 2015, ruining 35% of inflows year to date, as per the source. And Turkey is also to feel the brunt of this depletion.
All in all, tensions persist in the country and it’s better not to taste this ETF now. Below we highlight the key details of the fund. The fund has a Zacks ETF Rank of #5 (Strong Sell) with a High risk outlook.
TUR in Focus
The ETF provides a pure play exposure to 70 Turkish stocks. The fund is highly concentrated on its top 10 holdings which make up for nearly 60% of assets. Financials dominates the fund’s returns with less than half of the portfolio while industrials and consumer staples take double-digit exposure in the basket.
The fund has amassed around $308.1 million in its asset base. The fund charges 62 bps in annual fees from investors and yields 5.40% annually (as of November 21, 2016). TUR has Zacks ETF Rank #5 with a ‘High’ risk outlook (see: all broad Emerging Market ETFs here).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Get the full Report on TUR - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.