Finally a Way To Invest in Mongolia!
No that’s not a joke. Many people don’t know this, but Mongolia has had one of the fastest growing stock markets in the world over the past 10 years and with a huge new mining project about to open and a market oriented government, this may be one of the few investment areas that I think people could possibly make above market, risk-adjusted returns. Of course, the reason that I believe there are still above-market returns to be made in Mongolia is that there is no convenient way for most investors to get access to the Mongolia stock market…until now. Van Eck, a company that has created a number of passively managed etfs for countries like Vietnam and Indonesia has announced it will be launching a Mongolia ETF:
There hasn’t been an announcement of when it will start trading, but given that this is first SEC filing it could still take a year or two. Of course the fund will still be quite risky and prone to the sort of volatility that usually characterizes emerging markets. Also, I believe it is incredibly difficult to make above market risk-adjusted returns and that is far from a guarantee with this. But I’ve been excited about investing in Mongolia for years and have been waiting for a fund like this to appear for a long time. Also, one advantage of Mongolia is that because it is such a mineral rich economy its stock market gyrations may be relatively less correlated with the United States than other investments. So when this ETF does launch, I’ll definitely be clearing some room in my portfolio for it!