Market Overview

Beyond SPY: Other ETFs Impacted By 2012 Elections


In a U.S. presidential year, it's easy for Americans to caught up in all the salacious drama that is part of politics in this country. That's understandable, but trading is a global game and that means there's more than one election worth paying attention to this year.

That also means there are more ETFs than just the SPDR S&P 500 (NYSE: SPY) that will be moved by electoral politics in 2012. Our previous examination of 2012 election ETFs, which took place in September 2011, turned up funds representing both developed and emerging markets, including the iShares MSCI Spain Index Fund (NYSE: EWP) and the Market Vectors Russia ETF (NYSE: RSX).

Here are a few more ETFs that will be in political play this year, maybe quite soon in some cases.

Market Vectors Egypt ETF (NYSE: EGPT) From the Arab Spring to a death spiral that took the ETF to depths that were even lower than where it traded immediately following the onset of political violence in Egypt, EGPT had a wild 2011. Really, the indictment of this ETF was that it traded lower and lower AFTER the Mubarak regime was displaced. Clearly a bottom was put in late last year because EGPT is up a whopping 42% year-to-date. Those gains and more upside hang in the balance with Egypt's tentatively-scheduled April presidential election fast approaching.

iShares MSCI Belgium Investable Market Index Fund (NYSE: EWK) Yes, Belgium is a developed market…one that geographically sits in the middle of Europe's sovereign debt crisis and one that faces plenty of fiscal woes of its own. You know, things like lower credit ratings. Not to mention until December 2011, Belgium had gone over 500 days without a formal government. That kind of stuff is usually reserved for frontier markets, not developed markets.

Belgium holds municipal and provincial elections in October and it is possible these results could test the federal government's ability to build a consensus and effectively govern.

iShares MSCI Malaysia Index Fund (NYSE: EWM) As is the case with many Asian tigers, Malaysia has had its share of political issues and for U.S. investors, the creates potential peril and opportunities in EWM. Malaysia will have a general election before 2013 and it could come as early as next month by some estimates. Issues key to EWM's post-election fortunes will be the government's ability to boost trade ties in and out of the ASEAN region and reduce corruption.

The allegations of corruption have cost the country four places in Transparency International's Corruption Perceptions Index, dropping it to a still relatively respectable 60th, according to Lim Kit Saing.

Others to keep an eye on later this year: iShares MSCI France Index Fund (NYSE: EWQ), iShares MSCI South Korea Index Fund (NYSE: EWY) and the WisdomTree India Earnings ETF (NYSE: EPI).

Posted-In: Long Ideas News Short Ideas Specialty ETFs Emerging Market ETFs Politics Events Global Best of Benzinga


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