T̶h̶e̶ ̶D̶a̶r̶k̶ ̶C̶o̶n̶t̶i̶n̶e̶n̶t̶ Like No Place Else!

Brian, Bickford, Danak

For this week

EZA (South Africa index)
NAFAX (Nile Pan-Africa Fund)
WAFMX (Wasatch Frontier Emerging Small Countries Fund)

We took a look at EZA, particularly at the components of the fund. In poking around, Brian came up with some articles that discussed how some funds will sometimes not necessarily reflect the country they are based in. While this is not a bad thing in itself, it may not be ideal if we are trying to focus on a specific economy, as opposed to the global economy.

One component of EZA, MTN Group , is a telecom company that does a lot of business with Iran. Even though this is a South Africa-based company, it would probably be affected by events in Iran and abroad. This is something to consider when choosing this as a possible investment.  

Next, we took a look at NPN (Nuveen Pennsylvania Municipal V?), the second largest holding, and we had a hard time figuring out what it has to do with a South Africa index. Some googling brings up NPNSJ, which is a South Africa media company. That makes more sense, and like when you're doing math and get some kind of garbage answer out of your calculator, you have to call it and look a litte deeper. Did Yahoo make a mistake? Definitely: A look at the ishares summary for the fund shows that they are not investing in Pennsylvania. Additionally, some more searching yielded further discrepancies.

NEW RULE: Be a little more skeptical when looking up data from sites like Yahoo! Finance, or anywhere really. If something doesn't make sense, it probably isn't right.  

Let's take a look at NAFAX:

Well the fund's Chief Investment officer sure thinks so. While he is a biased source, he does make some interesting points about Africa as an emerging market with growth potential. We took a look at the Style Box for the fund, and that confused us further. We are not sure how to judge if this is a good investment or not. It is very diversified, however how do we judge the components?

That's a good questions, and that's where we leave it. Next week, we are going to keep on digging. 

Profit!