iShares MSCI Turkey ETF (TUR): Insight

The iShares MSCI Turkey ETF (TUR) provides equity exposure to Turkey which is the largest economy in the Emerging Europe region. The GDP of Turkey amounts to around $845 billion according to the latest 2022 estimate projections. The TUR exchange traded fund (ETF) offers very risky single country emerging market equity exposure and should be deployed as a tactical tool within a diversified portfolio. As an example the iShares MSCI Emerging Markets ETF (EEM) allocates less than 0.3 percent towards this country, although this exposure was closer to 2 percent back in 2015. Therefore, before considering an investment, investors should review their portfolio for existing exposure to the Turkish stock market in order to avoid unintentionally over weighting this region.

The TUR ETF provides diversification benefits when added to an equity strategy as it offers the following correlations vs: EEM (0.6) and SPY (0.0). See the below charts with the 200 days rolling correlation.

TUR vs. EEM 200 Days Rolling Correlation – Source: StockCharts.com
TUR vs. SPY 200 Days Rolling Correlation – Source: StockCharts.com

The iShares MSCI Turkey ETF should be used as a satellite position within global or emerging equity strategies as well as in more niche thematic multi-asset investment baskets. It is advised to check the allocation of Turkey within the underlying benchmarks in order to play the TUR on a tactical basis correctly.

Index / ETF Construction

The iShares MSCI Turkey ETF seeks to track the investment results of a broad-based index composed of Turkish equities. The underlying index is the MSCI Turkey IMI 25/50 Index (index ticker: NU724019). The TUR ETF is approx. $279m in size and the portfolio offers 47 holdings at the moment of writing this article.

The top materials sector holding of the TUR ETF constitutes around 9% of the portfolio while the top 5 stock allocations account for about 33%.

TUR Top 10 Holdings – Source: iShares.com Website

On the sector level the industrials sector accounts for around 23% of the ETF whilst the top 3 sectors: industrials, materials and financials constitute nearly 62% of the total portfolio.

TUR Sector Breakdown – Source: iShares.com Website

Technical Charts

TUR Absolute Performance – Source: StockCharts.com
TUR Relative Performance: TUR vs. EEM Ratio – Source: StockCharts.com

Fees

This fund levies a 0.57 percent expense ratio.

Alternatives

There are no alternative ETFs listed in the U.S. to gain single country exposure to Turkey.


If you are interested in the European listing equivalents, please send us a direct message to discuss the best investment alternatives.

At Algo-Chain we track over 10k ETFs listed globally and deliver optimized model ETF portfolio solutions driven by artificial intelligence and data science.

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