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This article examines the five best Africa ETFs you can buy. Let’s get started.
Best Africa ETFs
Africa is home to 1.2 billion people who have experienced significant GDP growth in the past decade. While the crisis has unfortunately slowed this growth in some regions, the economies in Africa are some of the fastest-growing in the world.
Several fund providers have aimed to capture this economic expansion through an Africa exchange-traded fund. We have identified and compared the best ones on the market so you can select the optimal Africa ETF for your portfolio.
Here’s a quick look at the best Africa ETFs:
- iShares MSCI South Africa ETF (EZA)
- VanEck Africa Index ETF (AFK)
- Global X MSCI Nigeria ETF (NGE)
- VanEck Egypt Index ETF (EGPT)
- Franklin FTSE South Africa (FLZA)
Below, we will examine each fund and help you decide which one is best for your portfolio.
#1. iShares MSCI South Africa ETF (EZA)
- 1-Year Performance: +10.99%
- Expense Ratio: 0.59%
- Annual Dividend Yield: 4.73%
- AUM: $326 million
- 3 Month Avg. Volume: 294,748
- Number of Holdings: 41
- South Africa Exposure: 91.69%
- Inception Date: 2003
The iShares MSCI South Africa ETF provides exposure to large-cap and mid-cap companies in South Africa.
EZA is a pure-play investment in the emerging South African economy.
Over 90% of EZA is allocated to South Africa, which is not too common in the average emerging market exchange-traded fund.
For example, the iShares MSCI Emerging Markets ETF (EEM) – the most well-known emerging market fund – has just a 3.16% allocation to South Africa.
The iShares MSCI South Africa ETF is primarily invested in the Financials (31%), Materials (26%), Consumer Discretionary (17%), and Communication (11%) sectors of the economy.
And it’s highly concentrated in just 41 total holdings. The top holding in EZA has a rather large weighting, so it’s worth mentioning.
Naspers is a global internet group and one of the largest technology investors in the world.
The firm’s main interests are online retail, publishing, and venture capital, so this single holding provides a degree of diversification in its own right.
In sum, EZA enables targeted access to the only G20 nation in Africa. It’s the largest, oldest, most liquid, and has the second-bestdividend yieldof any African ETF on the market.
EZA Top Holdings:
- Naspers Limited (NPN: JSE) 12.79%
- FirstRand Limited (FSR: JSE) 7.80%
- MTN Group Limited (MTN: JSE) 7.12%
- Standard Bank Group Limited (SBK: JSE) 4.73%
- Sasol Limited (SOL: JSE) 4.72%
#2. VanEck Africa Index ETF (AFK)
- 1-Year Performance: -0.86%
- Expense Ratio: 0.79%
- Annual Dividend Yield: 3.69%
- AUM: $60 million
- 3 Month Avg. Volume: 12,613
- Number of Holdings: 79
- South Africa Weighting: 32.86%
- Inception Date: 2008
The VanEck Africa Index ETF provides the most diversified exposure to the African continent.
While the other ETFs in this article focuses on one specific Africa region, the VanEck Africa Index ETF invests across the entire continent.
Here’s a geographical breakdown of AFK:
- South Africa: 33%
- Nigeria: 16%
- Kenya: 11%
- Morocco: 11%
- Egypt: 5%
- Australia: 5%
- Canada: 5%
- UAE: 4%
- Zambia: 3%
- Tanzania: 3%
The Australian, Canadian, and UAE holdings are companies that are not incorporated in Africa but derive a significant portion of their revenue on the continent.
AFK’s large allocation to South Africa is no surprise and results in similar sector weightings as the iShares MSCI South Africa ETF from above, consisting mainly of Financial, Material, and Communication companies.
AFK is your best option if you’re seeking broad exposure to the whole continent.
AFK Top Holdings:
- Safaricom PLC (SCOM:NAI) 6.03%
- MTN Nigeria Communications PLC (MTNN: NSA) 5.23%
- Anglo American PLC (AAL: LON) 4.78%
- Attijariwafa Bank (ATW:CAS) 4.63%
- Guaranty Trust Holding Company (GTCO: NSA) 4.30%
#3. Global X MSCI Nigeria ETF (NGE)
- 1-Year Performance: -22.19%
- Expense Ratio: 0.89%
- Annual Dividend Yield: 4.92%
- AUM: $43 million
- 3 Month Avg. Volume: 15,442
- Number of Holdings: 22
- Nigeria Weighting: 64.82%
- Inception Date: 2013
The Global X MSCI Nigeria ETF provides efficient access to a broad basket of Nigerian securities.
NGE is highly concentrated in just 22 equities – mostly of the small-cap type – in the Nigerian economy’s Financials, Consumer Staples, and Materials sectors.
The fund’s top holding, Dangote Cement, is a Nigerian cement manufacturer and distributor with plants in nine other African countries. The company makes up about 15% of the entire Nigeria stock market.
Roughly half of the Global X MSCI Nigeria ETF consists of Financial equities, which supports the notion of fintech sweeping through Africa.
You’ll notice the words “bank,” “trust,” and “holdings” in NGE’s top holdings below.
NGE Top Holdings:
- Dangote Cement (DANGCEM:NSA) 15.41%
- Nestle Nigeria (NESTLE: NSA) 8.93%
- Guaranty Trust Holding Company (GTCO) 8.71%
- Zenith Bank (ZENITHBANK: NSA) 8.24%
- FBN Holdings (FBNH) 6.96%
#4. VanEck Egypt Index ETF (EGPT)
- 1-Year Performance: -4.52%
- Expense Ratio: 0.98%
- Annual Dividend Yield: 2.37%
- AUM: $21 million
- 3 Month Avg. Volume: 5,131
- Number of Holdings: 28
- Egypt Weighting: 98.02%
- Inception Date: 2019
The VanEck Egypt Index ETF is the only pure-play Egyptian ETF on the market.
EGPT consists mostly of micro-and-small caps stocks in the Real Estate (24%), Materials (18%), and Financials (14%) sectors.
VanEck can name its price on this ETF because it’s the only show in town – and it does. Egypt’s expense ratio is 0.98%.
The VanEck Egypt Index ETF is your best and only option if you’re seeking exposure to the Egyptian economy.
EGPT Top Holdings:
- Egypt Kuwait Holding (EKHO: CAI) 7.75%
- Commercial International Bank (CBKD: LON) 7.71%
- Eastern Company (EAST: CAI) 6.35%
- Talaat Moustafa Group (TMGH:CAI) 5.57%
- Fawry For Banking Technology and Electronic Payment (FWRY: CAI) 5.55%
#5. Franklin FTSE South Africa ETF (FLZA)
- 1-Year Performance: +13.35%
- Expense Ratio: 0.19%
- Annual Dividend Yield: 3.43%
- AUM: $5.3 million
- 3 Month Avg. Volume: 1,056
- Number of Holdings: 61
- South Africa Weighting: 92.85%
- Inception Date: 2018
The Franklin FTSE South Africa ETF passively invests in South African large and mid-capitalization stocks.
FLZA is nearly the same as the first fund we covered – the iShares MSCI South Africa ETF (EZA) – but it costs less and is more diversified.
This is a rather small ETF in terms of assets under management and the trading volume, but we chose to include it because its competitive pricing is noteworthy.
The Franklin FTSE South Africa ETF has an expense ratio of 0.19% compared to 0.59% from the iShares MSCI South Africa ETF.
This may be more appropriate for cost-sensitive investors deploying a buy-and-hold strategy.
FLZA Top Holdings:
- Naspers (NPN:JSE) 11.56%
- MTN Group (MTN: JSE) 7.68%
- FirstRand Limited (FSR: JSE) 6.73%
- Sasol Limited (SOL: JSE) 4.26%
- Standard Bank Group (SBK:JSE) 4.24%
Alternatives to the Best Africa ETFs
The list above is exhaustive – those are your choices when it comes to U.S.-listed ETFs that have Africa as its primary geographic holding.
However, many emerging market ETFsstill provide exposure to Africa, albeit to lesser degrees.
Here are your options with their corresponding allocations to the region:
- iShares MSCI Emerging Markets ETF (EEM) 3.16%
- Vanguard FTSE Emerging Markets ETF (VWO) 3.7%
- iShares Emerging Markets Dividend ETF (DVYE) 4.26%
- The Emerging Markets Internet & Ecommerce ETF (EMQQ) 1.67%
- Schwab Emerging Markets Equity ETF (SCHE) 3.89%
Best Africa ETFs: Frequently Asked Questions
Is there an Africa ETF?
Yes, there are multiple Africa ETFs: iShares MSCI South Africa ETF (EZA), VanEck Africa Index ETF (AFK), Global X MSCI Nigeria ETF (NGE), VanEck Egypt Index ETF (EGPT), and the Franklin FTSE South Africa ETF (FLZA).
What funds invest in Africa?
Several funds invest in Africa. We recommend the lower-cost, U.S.-listed exchange-traded funds if you’re looking for exposure to African equities. The following ETFs may pique your interest: EZA, AFK, NGE, EGPT, and FLZA.
How do I buy an ETF in South Africa?
You can buy an ETF in South Africa by logging into your investment app and searching for the ticker symbol “EZA” or “FLZA.” Both of these ETFs are primarily invested in South Africa, so choose which one is best for you, decide how many shares you’d like to buy, and then click the buy button.
Bottom Line: Best Africa ETFs
The economies throughout Africa are some of the fastest-growing in the world. It’s no wonder that investment in the region is increasing too.
Your options are still limited regarding African ETFs, but at least you now know them.
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best Africa ETFs.