EZA Profile
The iShares MSCI South Africa ETF is designed to track the investment results of the MSCI South Africa Index, which targets the performance of large- and mid-capitalization segments of the South African equity market. The fund seeks to replicate this index by investing at least 80% of its total assets in the component securities of the index or in investments that have economic characteristics substantially identical to those of the index components.
The MSCI South Africa Index, which serves as the fund's underlying benchmark, is constructed using a capping methodology that restricts the weight of any single group entity to a maximum of 25% of the total index weight. This ensures a more balanced representation of the South African equity market, preventing over-concentration in any one entity or sector.
As a non-diversified fund, the iShares MSCI South Africa ETF has a higher degree of exposure to its underlying assets, making it more sensitive to market fluctuations and specific economic conditions in South Africa. The fund is structured to offer investors targeted access to the South African market, providing exposure to a wide range of sectors including financials, consumer services, and basic materials, which are prominent in the South African economy.
The ETF is particularly appealing to investors seeking to capitalize on South Africa's economic growth and potential within the emerging markets. However, due to its non-diversified nature, it carries higher risks, particularly related to the economic and political landscape of South Africa. This makes it suitable for investors with a high-risk tolerance and a long-term investment horizon.
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