If you're looking for a way to diversify your portfolio, one way to do so is to add some geographical diversification and invest in other parts of the world. Even if you're unfamiliar with businesses in other countries, there are exchange-traded funds (ETFs) that can give you some exposure to a wide range of stocks.
That's what investors can expect with iShares MSCI South Africa ETF (NYSE Arca: EZA) which invests in both large and mid-sized businesses that are based in South Africa. Over the past year, the ETF has risen by 31%, which is only slightly less than the S&P 500's returns of 32% during that time. The fund has a total of 37 holdings and many of them are value-oriented investments, with the ETF's average price-to-earnings multiple coming in at just under 15.
Three sectors make up three-quarters of its total holdings: financials, consumer discretionary, and materials. Consumer staples and communications account for more than 8% apiece and no other segment makes up more than 3%. Although the fund is diverse, its largest holding, technology-focused Naspers Limited (OTC:NPSNY) – which the ETF classifies under consumer discretionary, accounts for 21% of its total weight. Banking company FirstRand (OTC:FANDF) is the only other stock that makes up more than 6% of the fund's holdings, with the majority being at 3% or less.
In addition to provide some good diversification, the fund also pays a yield of 4.7%. And its net expense ratio of 0.59% is comparable to the fees you'll come across with many other specialized ETFs.
