Thanks to the rise in the prices of Natural resources, this region is gaining increasing popularity. Kazakhstan is on the charts as one of the largest oil producing economy and next to Mongolia is the most coal producing country. The commodity centric region is basically encashing on the recovery of the Chinese economy, which has shown a reasonable purchasing managers index. A year-over-year basis has seen a notable improvement in the power production of China, which has increased by 13.4%. Since China is the major importer of the power sources, an increase in power consumptions majorly affects the value of the subsequent. The healthy growth impact of China can be seen from its increase in the monetary growth, which is one of the measuring tools which help to analyze the growth of the economy. Both these factors are known to be symbolic of healthy and good trading ties with the Central Asian region for which the impact is bound to progress to this side.
The forecasts issued by the IMF and Asia Development Bank clearly show that the Central Asia Region is progressing towards the healthy trends in the domestic consumption and its capital spending. This majorly leads to the consistent growth and an increase in the intraregional growth. The investment opportunities are inclined towards theMongolia mutual fund due to the supportive local fiscal and monetary policies of the government. The region is sure to face a beneficial phase of healthy Export-oriented and external increase in demand for commodities. The overall pictorial growth of these economies is likely to show figures that depict low unemployment and fairly good wages, leading to good GDP figures.
Complete entry points are being offered by Coal and Oil commodities. This Central Asia mutual fund operates at an annual of 0.69%, but its stands an approximate 20% less beta risk, which is a factor favorable for the financial fund. The expense ratio is quite high according to the market space but it still has trapped energy that needs to be further focused on.
Due to the most recent Coal Rally there has been a sustainable hike in the Coal equities. As these countries are abundantly stocked with the natural reserves of resources they are showing momentums in the flow of investments progressing towards this area. Little is left to say about the 5.5 percent of the ETF's weight taken up by Mongolia and surprisingly U.K. and Canada combine for nearly half of the weight because the index comprises of the domiciled and revenue orientation from Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan & Uzbekistan. The last three months have seen a rise in the valuation of the related ETF by 8.5%. The 22 securities from all over the globe have facilitated exposure to this region and embarked a potential growth keeping in mind the demand and supply traffic for coal , natural gas and oil reserves.
As on June 30, 2013, 19.45% of the assets of the fund are related to Materials and 18.46% towards Energy Minerals. The Financials and Oil & Gas sector are the holders of nearly 30% of the industry breakdown assets of the Central Asia mutual fund.
Global X Central Asia ETF [AZIA] provides the access to investments of the foreign listings in the Central Asian Region, primarily from Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan & Uzbekistan. This Central Asia mutual fund was introduced in April 2013 and delivers as per the performance of Solactive Central Asia and Mongolia Index. As a matter of fact Mongolia fund is also not far behind the race. More than thirty percent of this Central Asia fund is concentrated in the top most holdings with Kazmunaigas Gdr , Eurasian Natural Resources Corp.Plc., Kazakhmys Plc, Spt Energy Group Inc., and Kcell Gdr respectively.