Investing in Emerging Europe

This blog post will cover how investors can invest in many emerging European markets, including Poland and Hungary when limited to US exchanges. Some of the top options available include ETFs and ADRs, and there are a select few options available for investors.

Indexes: The two indexes I will be following include the MSCI Central and East Europe and CIS Index and the MSCI Emerging Markets Europe Index. Both of these indexes track the performance of European equities, in markets like Poland, Hungary, Czech Republic, Kazakhstan, Romania, Turkey, and Greece.

If you are limited to US exchanges, your best options include Poland, Hungary, Greece, and Turkey. Some of the options available include regional ETFs, country-specific ETFs, and ADRs. Other markets, such as Romania for example, are extremely difficult to access directly, and only represent a small % of assets of frontier market ETFs.

Investment Options in Europe to Consider

All of these countries, with the exception of Hungary, have country-specific ETFs that you can invest in. This is the simplest option for many investors. However, there are also multiple ADRs available in industries like banking and telecommunications.

Investing in Poland

Poland is the largest constituent in both the MSCI Emerging Europe Index and MSCI Central and East Europe and CIS Index.

The easiest way to access Poland is to invest in the iShares MSCI Poland Capped ETF ( EPOL), which mainly invests in Polish equities in the banking, energy, and consumer industries. There are also around 20 Polish ADRs, but these trade OTC, and often have higher trading fees. One option to consider is Interactive Brokers, which lets you trade on the Warsaw Stock Exchange.

Investing in Hungary

Investing in Hungary is difficult because there is no specific Hungary ETF and the Hungary ADRs trade on the OTC markets. However, you can take a look at these companies if you are interested in investing in Hungary:

• Fotex: A general retailer
• Magyar Telecom: One of Hungary’s leading telecom companies.
• MOL Magyar Olaj-ES Gazipari: An oil and gas producer

Investing in Greece

The simplest way to invest in Greece is by investing in the Global X MSCI Greece ( ETF), which invests in companies in the financial, consumer, utilities, communication, energy, and real estate industries. There are also around 20 Greece ADRs, and most of these companies are shipping companies. While I have been following Greece’s economy for several years, I have not initiated on this market yet, and do not have any bullish articles for Greece.

Turkey

Turkey is another emerging market that should be on everyone’s radar. The iShares MSCI Turkey ETF ( TUR) is a well-diversified ETF and a great way to gain exposure to Turkey’s stock market.

There are around 25 listed ADRs in Turkey, and two of these do not trade OTC. One of my favorite options at the moment is Turkcell, which is a telecom company in Turkey.