Let’s discover an ETF with an incredible performance over the last year: from the market context to the product review.
The Turkish economy demonstrated surprising resilience in 2023, expanding by 4.5% and surpassing the $1 trillion mark in terms of gross domestic product for the first time. This growth was primarily driven by domestic consumption, which represents approximately 60% of the country’s GDP, despite domestic and international political and economic challenges. The significant increase in the financial and insurance sectors, with growth of 9%, and construction, which grew by 7.8%, reflects a diversification of the country’s economic bases. This complex and rapidly evolving context is the backdrop to the analysis of the Amundi MSCI Turkey UCITS ETF Acc, one of the most interesting funds that aims to capitalize on the dynamic Turkish stock market.
Turkey: between opportunities and challenges
GDP per capita reached a record high of $13,110, an indicator of growing prosperity despite recent economic turbulence, such as runaway inflation and contested interest rate policies under the presidency of Recep Tayyip Erdogan . The “growth at all costs” approach has led to significant political victories for Erdogan, consolidating his mandate with re-election in the latest presidential and parliamentary elections.
However, the road to a more stable economy is not without obstacles. Recent events, including significant changes in the country’s economic leadership and a revised monetary policy, together with the devastating consequences of two major earthquakes, present Turkey with crucial economic challenges in the near future.
Amundi MSCI Turkey UCITS ETF Acc
The Amundi MSCI Turkey UCITS ETF Acc offers a unique opportunity to invest in the Turkish stock market, which has shown remarkable growth despite global and domestic economic challenges. The ETF manages assets of approximately 65 million euro and is characterized by its synthetic replication structure through unfunded swaps. It therefore uses a synthetic replication strategy to emulate the performance of the MSCI Turkey index, which reflects the performance of Turkish large and mid-cap stocks. Launched on August 11, 2006, and domiciled in Luxembourg, it is positioned as a fairly economical choice for investors, thanks to its medium/low total expense ratio (TER) of 0.45%.
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Yield and distribution
The Amundi MSCI Turkey UCITS ETF Acc presents itself as an attractive investment vehicle, reflecting the dynamics of an expanding Turkish economy. The fund has seen impressive returns, up 28.48% in the current year alone, and has maintained consistent growth over the years, with an accumulation of +54.38% since its launch in 2006. These numbers reflect not only the resilience but also the growth potential of the Turkish market, despite the economic and political challenges faced by the country.
The fund’s distribution policy is based on accumulation, a strategy that automatically reinvests dividends generated by equity holdings. This approach is particularly advantageous for long-term investors looking to benefit from the compounding effect. Through accumulation, the ETF seeks to maximize capital growth over time while avoiding the distractions and costs potentially associated with frequent distributions.
The ETF’s returns have been particularly impressive over the last three years, during which time it has exceeded many expectations with aincrease of 128.06%. This increase occurred despite global economic volatilities, demonstrating the fund’s ability to navigate through periods of uncertainty. Furthermore, the fund showed a robust performance on a five-year basis, with a increase of 77.49%, a sign of effective management and a well-calibrated investment strategy.
Risk Profile
Investing in emerging markets such as Turkey involves a higher degree of volatility and risk than more mature markets. The Amundi MSCI Turkey UCITS ETF Acc is no exception, with annual volatility of 32.53%. This level of volatility reflects economic and political instability that may affect the Turkish stock market, including changes in monetary policy, geopolitical tensions and significant changes in domestic economic policies.
However, the fund has demonstrated an ability to manage these risks, providing investors with compensating returns. The risk-adjusted return ratio, which measures the risk-adjusted return, shows values of 0.80, 0.81 and 0.33 for one, three and five years, respectively. These numbers indicate that, despite its high volatility, the fund was able to offer satisfactory returns relative to the risk taken by investors.
Additionally, the maximum recorded decline, another risk indicator that measures the maximum loss from a peak to a trough before a new peak, has been -75.44% since its creation. This shows that while there are significant growth opportunities, there are also risks of considerable losses, underlining the importance of carefully evaluating your risk appetite and investment objectives before committing to this ETF.
In conclusion, the Amundi MSCI Turkey UCITS ETF Acc offers a balance between high growth potential and significant risk, suitable for investors with a good volatility tolerance and a long-term investment horizon, who can capitalize on any market fluctuations and gain from the growth potential of the Turkish market.
The ETF is listed on Borsa Italiana and other significant markets, offering easy accessibility to international investors.
| Disclaimer The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings. |
Original article published on Money.it Italy 2024-04-30 16:35:00. Original title: Questo ETF azionario è salito del +128% in un anno
