iShares MSCI Australia Fund: An Alternative Way to Play Fed Rate Cuts

The iShares MSCI Australia Index Fund (EWA) is an alternate way to play the markets after the projected rate cuts by the Federal Reserve. This Index Fund invests in publicly traded securities in the Australian Stock Exchange. This fund gives investors some foreign stock and currency exposure as well as exposure to mining companies.

The top three sectors that make up the Australia Index Fund are:

45.8% Financials
22.5% Materials
8.2% Industrials

Now with agriculture and mining accounting for the majority of Australia's exports, a downturn in the commodity markets is a risk to this index fund. With commodities booming right now, this index fund has performed very well this year.

Some of the top holdings in the fund include BHP Billiton (BHP), National Australia Bank (NABZY.PK), and Westpac Banking Corporation (WBK), companies that individually have performed very well this year.

The expense ratio on this index fund is reasonable at 0.54% so the fees won't eat into your gains.

Disclosure: Author doesn't own any of the equities mentioned in this article.

Comments

[Tom B:]

I've got some. I like it. I'll probably hold it 5 years or so, keeping my eye on climate factors. I expect Australia to have difficulties with climate change due to their aridity.

2007 Dec 11 09:19 AM