Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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The Central Europe & Russia
Fund (CEE) Has Showered Investors with +35% Annualized Gains |
Published:
October 12, 2007
Eastern and Central Europe offer an attractive combination for
investors. The region is growing at rates similar to most other
emerging markets around the world. At the same time, due to the
adoption of EU law and fiscal discipline, these nations offer
currency and political stability of the sort typically found
only in developed nations.
The Central Europe & Russia Fund (NYSE: CEE, $58.15) is a
closed-end fund that invests in this region, along with Russia
and Turkey. The fund seeks to have roughly 90% of its assets
divided equally between Central/Eastern Europe and Russia with
the remaining 10% invested in Turkey. As of the end of June, the
fund had 67 holdings and 98% of assets were in common stocks.
The fund's single-largest country bet is on Russia. Prominent
Russian natural resource firms Lukoil, Gazprom, and Norilsk
Nickel account for around one-quarter of the fund's total
assets.
The rationale for investing in Russia is somewhat different than
for Eastern Europe. Russia is extraordinarily rich in natural
resources including oil, natural gas, and metals like nickel.
It's also a key supplier of these resources to the European
market. For example, Russian gas accounts for more than 50% of
Germany's supply and more than 90% of supply in Hungary.
Therefore, Russia benefits from growth across the EU in terms of
greater sales of such vital commodities. Of course, Russia is
also a key supplier for such commodities into the fast-growing
Asian markets.
Also, just as is the case in Eastern Europe, economic growth in
Russia means growth in domestic consumption. The Russian market
is becoming an increasingly important destination for European
exports.
Outside of energy and natural resources, one of CEE's largest
bets is on financial services. Banks and financial services
firms account for more than one-quarter of CEE's assets. For
example, in Poland the fund has significant investments in Banka
Polska and Bank Pekao, two of the nation's largest banks. As
economies mature and develop, financials tend to show
considerable growth. On the commercial front, young businesses
in the emerging markets need access to capital, and banks offer
that funding.
And on the consumer front, individuals need access to basic
savings and deposit services for their cash.
More
importantly, mortgages were unheard of across most
of Eastern Europe a decade ago. Nowadays, some nations are seeing
mortgage-lending growth topping +20% annualized. That spells
sharply rising interest income for banks.
Another big bet for CEE: telecommunications services. The major
telecommunications firms are among the largest publicly traded
companies in Eastern Europe. Once monopoly providers owned by
the government, most have now been privatized, but still
maintain overwhelming market share in their home nations.
The region's primary telecom providers are not only growing, but
they're growing profitably. Margins for the best telecoms in the
region are double or more the levels of those in developed parts
of Europe. In addition, many telecom providers in the east are
showing growth by selling services such as high-speed Internet
to their existing subscribers.
Finally, it's worth mentioning Turkey. Turkey is not yet part of
the EU, though the country is in the early stages of a bid to
enter the European Union. The nation is taking steps to get its
financial house in order and ease fears of political
instability. Such reforms have helped the economy considerably;
the Turkish stock market has soared +725% over the past five
years in U.S. dollar terms.
CEE is well-diversified and has exposure to the countries and
industries that will benefit most from growth in emerging
Europe and Russia. And the fund also has a proven track record of success,
up more than +35% annualized over the past five years. 
-- Paul Tracy
Editor
StreetAuthority
Market Advisor
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receive in-depth guidance on today's leading investing
opportunities each month, plus access to five model
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Paul Tracy
founded StreetAuthority and became Chief Investment Strategist in 2001. Prior to
that he spent several years as Managing Editor at a multi-million dollar
financial publishing firm with over 150,000 subscribers. In addition to
his role as managing editor and lead financial writer, he was also
responsible for equity research and managing a team of seasoned
professional financial writers, researchers and market commentators.
Paul's previous experience
includes a position at Robert W. Baird & Co.'s full-service
brokerage operations as well as economic research work on a Money and
Banking project funded by the National Bureau of Economic Research. He
has also spent time doing outside consulting and research for the
University of Virginia, has appeared as a guest expert on several
prominent financial radio shows, and has been a featured speaker at
various investment conferences across the U.S.
Paul graduated with a B.S.
in Finance and Management from the McIntire School of Commerce at the
University of Virginia.
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