Eastern Europe ETF

First and foremost it is important to take a look at what is meant by Eastern Europe and which countries are overweighed within the Eastern Europe MSCI index.

Russia dominates this index and its subsequent Eastern Europe ETF with a share of 60%. Poland is coming in second with a 30% share. This leaves not much room for companies from other countries. Hungary and the Czech Republic have to be satisfied with only a few chunks of this regional market index.

Looking at this Eastern Europe ETF from a geographic point of view will leave you with a feeling of unbalance. On the other hand it is fully understandable that this Eastern Europe ETF is not balanced geographically.

A single publicly traded company must show a reasonable level of market capitalization to be included in an Eastern Europe ETF. And that precisely is the reason why you will not find companies of smaller Eastern European countries within this regional ETF.

When we look at this Eastern Europe ETF from a market sector point of view we also come up with some unbalances. The Energy sector dominates this ETF with a 40% weight, the Financial sector follows suit with a 30% weight (a common share for this important sector). The other 30% is well-balanced among varying market sectors.

If you want to invest in this particular regional Eastern Europe ETF you have to bear in mind that in fact you are also heavily exposed to Russia and the Oil and Gas market sector. Nothing wrong with that, but it is important to stress this point. 

iShares MSCI Eastern Europe Capped UCITS ETF

This particular iShares ETF is tracking the MSCI Eastern Europe index. The iShares MSCI Eastern Europe Capped ETF is a physical ETF which means that iShares is buying the underlying stocks.

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