Africa’s big potential comes with risks

Article Excerpt

The world’s second largest continent, Africa, has equally big potential. Where several of its national economies remain focused on growth, other African countries continue to grapple with weak corporate governance structures, poverty and military conflicts. Those factors have helped to hold back economic development. However, those challenges have done little to prevent individual companies from developing successful businesses. Here is an ETF that provides exposure to the continent’s top companies. While South African firms form the fund’s largest component, Moroccan companies are also significant contributors. We previously covered South Africa in our April 2018 issue; this time we look at Africa’s most-northwestern nation. VANECK VECTORS AFRICA INDEX ETF $21.03 (New York symbol AFK; TSI Network ETF Rating: Aggressive; Market cap: $55.9 million) invests in companies operating primarily in Africa. South African investments make up 33.6% of the fund’s assets, followed by Morocco (17.6%), Kenya (10.3%), Nigeria (8.9%) and Egypt (4.6%). Financial companies account for 37.4% of its assets, while Resources (20.8%), Telecommunication Services (12.5%), Consumer Non-Cyclicals…

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